SoftBank Group Corp targets USD750m worth of shares in WeWork IPO; investors clamour for bonds

16 Sep 2019

Japan’s SoftBank Group Corp plans to purchase at least USD750 million worth of shares in WeWork’s upcoming IPO, the Wall Street Journal reports. WeWork is an American real estate company providing shared workspaces for tech start-ups and services for other enterprises. Its forthcoming share offering, however, has met with ‘tepid investor demand’ and now SoftBank – which is already the biggest investor in WeWork’s parent – is looking to acquire 25% or more of the shares sold in an IPO predicted to generate around USD3 billion, and value WeWork at between USD15 billion and USD20 billion. The WSJ notes though, that this is significantly lower than the USD47 billion valuation SoftBank bought in at earlier this year, reflecting scepticism over the real estate company’s ‘governance and ability to reverse steep losses’.

Meanwhile, in an unrelated development, Japanese investors recently purchased JPY500 million (USD4.6 million) of SoftBank Group Corp bonds when Monex Group sold out the allocation on offer in under three minutes last week. The strong demand for Japanese investors to buy SoftBank Group Corp debt comes despite concerns related to recent investments in ventures such as Uber and indeed WeWork. SoftBank founder Masayoshi Son is looking to raise a total of JPY400 billion in the most recent bond sale by Monex and other brokerages, pricing the seven-year notes at a 1.38% interest rate. Bloomberg notes, meanwhile, it sold another JPY500 billion tranche of bonds in April.

Japan, SoftBank Group Corp