Adam Neumann’s WeWork Bid Could Run to $900M

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If at first you don’t succeed, try, try again.

Adam Neumann has submitted an unsolicited bid of more than $500 million to buy bankrupt WeWork (WE), the coworking company he co-founded, the Wall Street Journal reported.

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“Two weeks ago, a coalition of half a dozen financing partners — whose identities are known to WeWork and its advisers — submitted a potential bid for substantially more,” a spokesperson for Flow, Neumann’s new real estate startup, said in a statement to Commercial Observer.

CNBC reported that Neumann’s bid could increase to $900 million “pending due diligence,” citing a source with knowledge of the deal.

In February, Bloomberg reported that Neumann — who was ousted from WeWork as CEO in 2019 — joined a group of investors including Dan Loeb’s Third Point to put together a cash bid to buy the struggling company.

The Flow spokesperson did not share the group of “financing partners” that made the recent bid for WeWork, but CNBC reported that it did not include Third Point.

Neumann co-founded WeWork with Miguel McKelvey in 2010, and the pair turned the company from an unknown brand into one of the biggest coworking companies, with its name emblazoned on buildings around the world.

However, in what has been well documented in documentaries, books and television shows, Neumann grew WeWork at a staggering rate by signing leases — often in less desirable buildings — and dropping millions of dollars to acquire a variety of companies.

While that growth drove WeWork’s valuation to an eye-popping $47 billion, the leases proved a huge drain on its balance sheet. The company’s large revenue growth from 2016 to 2018 ended up coinciding with losses that grew at a similar pace.

Neumann was also known for his erratic leadership style, including throwing a tequila bottle through a glass pane in WeWork’s office and stuffing marijuana in a cereal box for a flight from Israel to New York. After an attempt to go public also shone a light on WeWork’s money-burning business model, Neumann stepped down as CEO.

The company eventually went public by merging with a special purpose acquisition company in 2021, but it has struggled to stop hemorrhaging money and filed for bankruptcy in November. Since then, WeWork has gotten out of dozens of leases across the country and faced a lawsuit from landlords for missed rent payments.

It’s unclear how WeWork’s executives and employees feel about a potential homecoming for Neumann. Bloomberg reported last month that the coworking company’s lawyers were not interested in negotiating with Neumann’s lawyers over an acquisition.

A spokesperson for WeWork said Tuesday that its board and advisers “review” any acquisition offer WeWork gets “to ensure we always act in the best long-term interests of the company.”

“As we’ve said previously, WeWork is an extraordinary company and it’s no surprise we receive expressions of interest from third parties on a regular basis,” the spokesperson said. “WeWork remains intensely focused on finishing the important work we began back in November, and believe we will emerge from Chapter 11 in the second quarter as a financially strong and profitable company.” 

Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.