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WeWork is all set to merge with BowX Acquisition Corporation (BOWX:US or NASDAQ: BOWX), a blank-check company, in a deal aimed at getting the distressed startup public after two years of failed listing attempts.
The transaction will combine the office-sharing firm with the special purpose acquisition company (SPAC), pricing it at US$ 9 billion, which includes WeWork’s existing debt. After going public, the merged company will raise US$ 1.3 billion for WeWork operations, including US$ 800 million from a private offering through Insight Partners, Fidelity Management, and funds managed by Starwood Capital Group.
The stock of BowX Acquisition Corporation (BOWX:US or NASDAQ: BOWX) soared over 7% per cent on Friday, March 26, (11: 52 AM ET) on the back of the above development.
The arrangement is expected to conclude in the third quarter of 2021, and has already been approved by both boards of directors.
In 2019, SoftBank, a Japan-based technology investment bank, had evaluated WeWork at US$ 47 billion. An earlier try to go public through a conventional public offering had failed, as then Chairman and CEO Adam Neumann resigned, and it closed sites and laid off its employees in order to survive amid the COVID-19-led office space slump.
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WeWork is now headed by CEO Sandeep Mathrani. In November 2020, the company reported that its overall clients and revenue declined sequentially in the third quarter of 2020.
The incumbent CEO of WeWork will continue to run the joint company after the transaction. The company board will be joined by Vivek Ranadive of BowX Acquisition Corp. and Insight Partners’ Deven Parekh.
Let us glance at the SPAC stock’s price-performance:
BowX Acquisition Corporation (BOWX:US or NASDAQ: BOWX)
The blank check stock has traded almost flat, with a marginal gain of 0.54 per cent in the last three months. It has declined by 0.341 per cent this year. It has a current share price of US$ 10.23.
BowX's Listing-To-Date Stock Performance Chart. (Source: EODHD/Others)
The diversified financial services provider has a market capitalization of US$ 494 million. The SPAC company got listed on the NASDAQ exchange on October 20, 2020.
