Adam Neumann, the co-founder of WeWork, aims to purchase the real estate company, which ousted him nine years after its inception, out of bankruptcy.
He claims to have the backing of “well-known capital sources,” including Third Point, led by Dan Loeb.
However, based on what Third Point said to CNBC, it clarifies that they have not yet committed to any financing, characterizing their discussions with Neumann as “preliminary.”
According to a letter from Neumann’s counsel, as reported by DealBook on Tuesday, Neumann is making a bid for WeWork’s acquisition.
Third Point stated to CNBC, “Third Point has had only preliminary conversations with Flow and Adam Neumann about their ideas for WeWork, and has not made a commitment to participate in any transaction.”
The details about the engagement of the Third Point with Neuman were first reported by the Financial Times.
Neumann along with his startup Flow, has been consistently expressing a sincere interest since December 2023 in acquiring WeWork and its leases out of bankruptcy or providing debtor-in-possession (DIP) financing.
This information is revealed in a letter obtained by DealBook from Neumann’s counsel, Alex Spiro.
In response to this, a spokesperson for WeWork stated to CNBC, “WeWork is an extraordinary company. As such, we receive expressions of interest from external parties on a regular basis.”
He added, “We and our advisors always review those approaches to act in the best interests of the company.”
According to the letter, these efforts extend back even further than December. Neumann had attempted to secure financing of up to $1 billion in October 2022, but former CEO Sandeep Mathrani rebuffed his efforts.
Neumann encountered resistance from WeWork advisors regarding his efforts, but eventually, they proposed that Neumann provide debtor-in-possession (DIP) financing instead of a term sheet, as stated in the letter.
The letter does not immediately clarify whether WeWork and Neumann’s team had signed a Non-Disclosure Agreement (NDA), although it mentions that the two sides had been exchanging markups on one.
Following years of financial struggles, WeWork filed for bankruptcy in November 2023.
Neumann stepped down in 2019 amidst mounting investor concerns regarding the company’s corporate governance and valuation.
A spokesperson from WeWork said, “We continue to believe that the work we are currently doing — addressing our unsustainable rent expenses and restructuring our business.”
He added, “will ensure WeWork is best positioned as an independent, valuable, financially strong and sustainable company long into the future,”
Statements regarding the engagement between Neuman and Spiro have not been enlightened as neither of them have not made any comments yet.
