BowX Acquisition announced this afternoon that its stockholders voted in favor of the business combination with WeWork. The deal was supported by 97.9% of the votes cast at the meeting, representing approximately 77.6% of BowX’s outstanding shares, the SPAC said in a news release.
The announcement brings to an end WeWork’s long and arduous journey to the public markets, including a failed IPO almost two years ago to the day. In 2019, after WeWork’s sky-high valuation failed to pass the smell test with investors poring over its financials, the company nearly imploded. Within about a month, the coworking office-space company hacked its valuation nearly 80% — down to $10 billion from $47 billion, removed co-founder Adam Neumann as CEO, and delayed its IPO indefinitely. In October 2019, WeWork was taken over by Softbank, its biggest investor, which gave Neumann a $1.7 billion golden parachute to leave.
By the end of the third quarter of 2019, Softbank had assigned WeWork a $5 billion valuation.
The business combination with BowX is expected to provide WeWork with the previously announced gross cash proceeds of approximately $1.3 billion, which includes the cash held in the trust account, a fully committed PIPE and an equity backstop facility provided by Cushman & Wakefield. In addition upon the closing of the transaction, WeWork will have access to up to $550 million of senior secured debt in the form of 7.5% senior secured notes under a purchase agreement with StarBright WW, an affiliate of SoftBank Group.
While the news release made no mention of redemptions, if any, BowX disclosed earlier today that it had lined up a $150 million backstop against just such a contingency.
The business combination is expected to close tomorrow. Read more.
