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Temasek and Trustbridge Eye Major Ownership of WeWork China

Dimitar Bogdanov
  • January 17th, 14:17
  • Last Updated: January 17th, 14:18
  • Temasek and Trustbridge held talks with WeWork China to buy a majority stake
  • The pair values the Chinese unit at around $1 billion
  • WeWork is undergoing a Softbank-led restructuring process

Temasek Holdings and Trustbridge Partners held negotiations with WeWork China to acquire a majority stake of the Chinese branch, as reported by Reuters.

The two companies value WeWork China at about $1 billion, said people familiar with the matter.

Accordingly, investment company Temasek and private equity firm Trustbridge submitted the proposal to the Japanese multinational conglomerate company SoftBank Group Corp, which is the major stakeholder of WeWork.

The pair wants to acquire more shares to give them combined majority ownership in WeWork China, the sources said.

WeWork holds 59% of WeWork China at the moment, while the rest is owned by other investors such as SoftBank, a Beijing-based private equity firm Hony Capital and Trustbridge.

The company raised around half a billion in July 2018 through its investors including Temasek, Trustbridge, SoftBank and Hony Capital in a deal valuing the company at nearly $5 billion. Similarly, WeWork had raised the same amount during the first round in 2017.

If Temasek and Trustbridge reach an agreement with WeWork and get the majority ownership, it would likely send the Chinese unit to a down round – a round of financing where the investors would pay less for the company’s shares, however, it could greatly lighten the financial burden on WeWork and SoftBank.

The American real estate company WeWork is going through a restructuring phase after receiving an investment of $9.5 billion by SoftBank, due to an unsuccessful public offering and the dismissal of founder Adam Neumann.

However, a part of SoftBank’s $9.5 billion aid package was supposed to come from Japan’s three largest banks, but the plan has stalled, making the situation difficult for WeWork.

WeWork China has outlined challenging revenue goals for this year, amidst all the challenges it currently faces such as staff reduction and weak employment rate at its businesses across China.

The Chinese unit earned $99.5 million in revenue in 2018, as shown in the WeWork’s IPO prospectus. WeWork’s difficulties have also affected its Chinese peers such as UCommune, which is working on issuing an initial public offering.

About the author

Dimitar Bogdanov
Dimitar Bogdanov
I have been a journalist for Invezz since 2012 and am one of the oldest on the team. My focus is on cryptocurrencies as well as general equity markets, although my experience is broad overall.

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