WeWork is considering major changes to governance to assuage investor concerns ahead of its upcoming initial public offering (IPO), Bloomberg News has revealed. The update comes after it emerged this week that the company’s biggest outside shareholder, Japan’s SoftBank, had urged the office space manager to shelve the float amid valuation concerns.
Governance changes ahead?
Bloomberg reported this morning, quoting sources with knowledge of the matter, that both of WeWork’s lead financial advisers – JPMorgan Chase & Co and Goldman Sachs – had have concerns about proceeding with an IPO which could value the company as low as $15 billion. This in turn has set off a push to make the public sale more palatable to potential investors with governance reforms.
The sources noted that any decision ultimately rests with the company’s co-founder and CEO Adam Neumann who maintains voting control through a three-class share structure and has been an adamant proponent of the WeWork IPO.
Bloomberg, however, noted that it was unclear what changes WeWork may make to its governance to improve interest in its float. The company recently responded to concerns by unwinding a $5.9-million payment it made to an investment vehicle managed by Neumann for use of the trademarked word ‘we,’ and further added a woman to its all-male board.
WeWork IPO still on track
Sources familiar with the matter meanwhile told CNBC’s David Faber that the office manager’s float was full speed ahead, with the WeWork IPO roadshow set to kick off as soon as Monday.
Last week, it emerged that WeWork was looking at a float valuation of about $20 billion, less than half the $47 billion figure the company reached in its last round of funding from SoftBank, which this week reportedly urged the office space manager to shelve its IPO after it received a cool reception from investors.