WeWork office start up valued at $9bn in share-listing plan

Office-sharing firm WeWork will finally see its shares start trading on the stock market.

The company said the listing would occur via a purchase by the publicly traded BowX Acquisition Corp.

The deal values WeWork at $9bn (£6.5bn) – roughly a fifth of the its estimated worth in 2019, before its earlier flotation effort imploded.

Investors raised questions about its finances and management by founder Adam Neumann, who quit amid the debacle.

After shelving its listing plans, WeWork trimmed back its business, closing roughly 100 locations and pulling out of some of the more tangential ventures – such as a wave pool maker – to which Mr Neumann had committed the company. It now employs one third of the staff it did in September 2019.

Though the rapid increase in working from home during the pandemic hit its business, WeWork said it expected the change in work habits to increase demand for the short-term leases it offers in the years ahead.

‘Substantial growth’

The firm has roughly 850 locations in 152 cities around the world and the majority of its renters today are big companies, who have turned to the firm for more flexibility with property commitments, it said. It reported $3.2bn in revenue last year – the same as in 2019.

“Today, WeWork is a more focused company built around a core flexible space business that is poised for substantial growth,” the company said in its announcement of the deal, which is expected to be completed by the third quarter of 2021.

WeWork, which is backed by Japanese investment giant SoftBank, said it will receive about $1.3bn in cash from the deal, allowing it to fund future growth.

BowX is a a so-called special purpose acquisition company, a shell firm that uses proceeds from a public listing to buy a private firm.

The firm, led by the owner of the NBA’s Sacramento Kings and affiliated with basketball legend Shaquille O’Neill, raised $420m when it started trading shares last August. Its shares rose more than 7% following the announcement.

BowX will be joined by private investors, including Starwood Capital Group and Fidelity, who have committed about $800m to the transaction.

– BBC

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