[ad_1]
WeWork’s founder is trying to buy it
Adam Newman rose to fame by turning WeWork into a cultural and business phenomenon, before being ousted from the workplace operator in dramatic fashion.
But for the past several months, he has been trying to buy the now-bankrupt business with the help of hedge fund mogul Dan Loeb, DealBook is the first to report.
Newman’s new real estate company Flow Global Is pressuring WeWork to consider its acquisition approach, According to a letter sent by his lawyers to WeWork’s advisers on Monday. Flow, which has already raised $350 million from venture capital firm Andreessen Horowitz, revealed in the letter that Loeb’s third point will help finance the transaction. (read the letter.)
Flow is seeking to purchase WeWork or its assets, as well as provide bankruptcy financing to keep it afloat.
But Flo’s lawyers accused WeWork of months of obstruction. “We write to express our disappointment at WeWork’s lack of commitment even to providing information to its clients for the purpose of value-maximizing transactions for all stakeholders,” the lawyers, led by Alex Spiro of Quinn Emanuel, wrote. Who also represents Elon. Musk and Jay-Z.
This is the latest twist for WeWork, Which became a symbol of venture capital excess in its 14-year history. The company grew rapidly, becoming the largest tenant in several major cities and achieving a paper valuation of $47 billion. And Neumann – who is backed by billions from Japanese tech giant SoftBank – pitched it as a way to “raise the consciousness of the world.”
But after WeWork failed to go public, largely due to investor concerns about its business model and corporate governance, Neumann stepped down as CEO in 2019. The company began to struggle and repeatedly sought to renegotiate its leases and cut costs. (It’s unclear whether WeWork stakeholders would be comfortable selling the company back to a man whom some of them see as helping create its problems.)
WeWork filed for bankruptcy last November. In a restructuring plan filed in bankruptcy court on Sunday, the company said it alone has more than $4 billion in secured debt and major creditors include SoftBank. At a court hearing on Monday, lawyers for the landlords and others complained that WeWork would not have enough money to pay rent.
Some experts have suggested that WeWork could be sold for a fraction of its outstanding debt, perhaps less than $500 million.
Neumann has sought to invest in WeWork for years. According to the letter, in October 2022, he sought to “arrange up to $1 billion in financing to stabilize WeWork.” But the company’s CEO at the time “discontinued that process without explanation,” the lawyers wrote.
When WeWork filed for Chapter 11, Neumann said at the time that “with the right strategy and team, a restructuring will enable WeWork to emerge successfully.” But he also said Flow – which is focusing on the residential real estate market – would “compete or partner” with his former company.
Flow’s lawyers wrote in the letter sent Monday that “in a hybrid work world where demand for WeWork’s product should be greater than ever,” the math of combining the two companies “significantly exceeds WeWork’s stand-alone value.” Could be more”.
What’s going on over here
A Treasury Department delegation is heading to Beijing for economic talks. Senior US officials will hold two days of meetings with their Chinese counterparts to discuss issues including government subsidies, China’s role as a lender to developing countries and the countries’ macroeconomic outlook. The discussions could pave the way for Treasury Secretary Janet Yellen’s second visit to Beijing in as many years.
Mortgage rates rose to more than 7 percent. The average rate on a 30-year fixed mortgage reached 7.04 percent on Monday for the first time since December, following stronger-than-expected jobs and manufacturing reports. The average remains below the 8 percent hit in October, a 20-year high; Mark Zandi, Moody’s chief US economist, recently predicted If rates return to that level, it would hurt President Biden’s re-election chances, even if the economy improves.
Novo Nordisk’s parent company has entered into an agreement to expand production of weight loss drugs. Novo Holdings agreed to buy Catalent, a major pharmaceutical subcontractor that fills injection pens, for $16.5 billion to help meet demand for Vegov and Ozempic treatments.
Meta’s Oversight Board urges changes to the social media giant’s rules on manipulated media. While the board allowed an altered video that showed President Biden behaving inappropriately to remain online, it urged the tech giant to change its “inconsistent” policy on the matter. The Oversight Board cited the potential impact of such fake videos on elections as the reason for taking action.
Saudi advisors headed to the Hill
Some of the most powerful bankers and consultants with ties to Saudi Arabia, including top executives from McKinsey and Teneo, are scheduled to appear in Congress on Tuesday as part of a Senate investigation into the kingdom’s growing influence in US business.
Advisers and deal makers are torn between Washington and Riyadh. Senator Richard Blumenthal, Democrat of Connecticut, launched the investigation last year after the PGA Tour struck a temporary deal with LIV Golf, a separate competition backed by Saudi Arabia’s Public Investment Fund, known as PIF. (Questions remain over the potential alliance after the PGA Tour announced a new list of American investors last week.)
The set to be displayed includes:
-
Michael Klein of Klein & Co., a veteran Wall Street deal maker, is known for having close ties to the Middle East and PIFs, including advising on Saudi Aramco’s IPO.
-
Bob Sternfels, global managing partner of McKinsey, who has advised Saudi Arabia on initiatives including the final formation of LIV Golf,
-
Teneo CEO Paul Carey, who advised on PIF’s deal with the PGA Tour,
-
and Rich Lesser, global chairman of Boston Consulting Group, whose top executives have had close ties to the crown prince.
Blumenthal has called on consultants to speak about their work advising the state on deals. The Saudi wealth fund sued the advisers in a Saudi court, arguing that they could not disclose confidential information.
Representatives for Klein and Teneo declined to comment. BCG and McKinsey did not respond to requests for comment.
A PIF spokesman said it was making “significant efforts” to respond to the Senate’s request for the documents, but stressed that ultimately Saudi law “deserves respect.” (PIF is working with Rafael Prober, partner at law firm Akin Gump.)
The tug-of-war highlights the complexity of the US relationship with Saudi Arabia. The appearance on Capitol Hill comes just a day after Secretary of State Antony Blinken met with Saudi Crown Prince Mohammed bin Salman in an attempt to restart talks in the kingdom on normalizing relations with Israel.
Blumenthal is expected to argue that advisers are hiding behind offshore contracts. ,Refusing to cooperate with this subcommittee would set a dangerous and indefensible precedent,” he wrote in a memo. (Blumenthal is deeply skeptical of any LIV-PGA deal.)
Officials may respond that they are bound by lawsuits and that cooperating with the Senate investigation would put their staff in Saudi Arabia at risk.
Deal makers may be left with few options. Congress may seek criminal or civil enforcement of subpoenas in a U.S. court.
“No matter what they do, they will be violating someone’s law,” Julian Kuo, a professor at Hofstra University Law School, told DealBook. “The answer is: Comply with the country you fear most.”
“This completely reverses their image as a desirable employer.”
, meaghan biroA human resources consultant on the wave of layoffs at Google says employees have hit morale low. Tech companies have continued job cuts To reduce costs; was the latest snapWhich laid off more than 500 employees on Monday.
The billion dollar bitcoin puzzle
As Bitcoin moves into the mainstream of Wall Street investing with a market cap approaching $840 billion, a London court is considering a mystery that has hung over the sector for years: the cryptocurrency’s pseudonymous creator “Satoshi Nakamoto.” ” Who is it?
The legal battle pits a group backed by Jack Dorsey against Craig Wright, an Australian computer scientist Who are expected to testify on Tuesday. Wright insisted that he is Satoshi, as the creator is known, and that he owns the intellectual property rights behind Bitcoin’s blockchain. Skeptics say Wright is lying, and have challenged him to produce the private key, or code, of the original store of Bitcoins, which would be worth about $47 billion today.
Lawyers for the Crypto Open Patent Alliance (a nonprofit backed by Coinbase and Dorsey’s digital payments company, Block) said in court on Monday that Wright’s claims were “blatant lies.” They are asking the court to rule that he is not Satoshi.
The story started in 2008 When a programmer named Satoshi Nakamoto published a paper about Bitcoin, a digital currency that lets people make transactions through a shared electronic ledger without traditional intermediaries like governments or banks. The idea took hold, but the identity of the creator remained unknown.
Many people, including Wright, have claimed to be the elusive Satoshi. Wright escalated the story by threatening Bitcoin developers with litigation and filing a lawsuit alleging IP infringement.
In an opening statement Monday, Wright’s attorney said the evidence would show Wright wrote the white paper.
A representative of COPA told DealBook that it would present evidence stating that Wright’s alleged evidence was fabricated and that they were drawn in fonts or paper stock that did not exist in 2008.
Crypto companies want this case to serve as a warning to future Satoshis. They also want to send Wright a clear message: Stop suing crypto developers, fearing the action is driving some programmers away from working on the Bitcoin blockchain.
read speed
deal
-
Blackstone is said to be making a takeover bid for skin care company L’Occitane, which has a market value of $5.4 billion. (Bloomberg)
-
In presentation materials for potential investors, Elon Musk’s xAI reportedly talks about access to “Muskonomy”, a group of billionaire companies. (Bloomberg)
Policy
best among the rest
We need your feedback! Please email ideas and suggestions to dealbook@nytimes.com.
