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Adam Neumann, the co-founder of WeWork, has submitted a conditional bid of about $600mn for the bankrupt co-working company he led until 2019, according to three people briefed on the matter.
Flow, Neumann’s new property company, confirmed the offer on Monday, saying “a coalition of half a dozen financing partners — whose identities are known to WeWork and its advisers — submitted a potential bid” two weeks ago.
Neumann, who resigned as WeWork’s chief executive in 2019, has been courting potential investors for months to finance his effort to regain control of the company. But Flow did not specify who had agreed to step in alongside the entrepreneur.
Third Point, a New York hedge fund that Neumann named in a letter to WeWork last month as a “partner”, is not involved, according to people familiar with the matter. Baupost Group, another investment group that had held discussions with Neumann, was not involved either, said people familiar with the firm.
Neumann had not yet signed a non-disclosure agreement, two people familiar with the matter said. However, he has said that in addition to the roughly $600mn he is bidding for WeWork, he would also invest hundreds of millions of dollars in the company, they added.
“WeWork is an extraordinary company and it’s no surprise we receive expressions of interest from third parties on a regular basis,” the company said in a statement. “Our board and our advisers review those approaches in the ordinary course, to ensure we always act in the best long-term interests of the company.”
The co-working group, which filed for bankruptcy in November, has been negotiating with creditors to come up with a plan for how it will exit Chapter 11. Despite Neumann’s overtures in recent months, there was no plan on the part of WeWork to sell itself.
Neumann sent a letter to WeWork in February stating he was “partnering” with Daniel Loeb’s Third Point in a bid for the company. However, the hedge fund told the Financial Times at the time that it had held “only preliminary conversations” with Neumann and Flow about WeWork and “has not made a commitment to participate in any transaction”.
Any bid put forward by Neumann will have to be palatable to creditors who stand to take control of the business once it emerges from bankruptcy. They believe the company’s value will largely depend on the concessions WeWork can win from landlords, as well as how many locations it ultimately decides to close to control its costs as it wraps up its bankruptcy proceedings.
Meanwhile, other deep-pocketed groups have been studying WeWork’s finances and could still make their own bids for the business.
The Wall Street Journal first reported Neumann’s preliminary offer for WeWork.