Adam Neumann WeWork bid faces financing, business plan and more issues | Wilnesh News

Five years after being ousted from the office-sharing company he founded, Adam Neumann has made a preliminary offer to buy WeWork for more than $500 million, lifting it out of bankruptcy. But it’s unclear whether he has the financing and necessary support from creditors to complete the deal.

In trying to take back WeWork, Neumann must contend with the company’s checkered past, funding uncertainty and the difficulty of valuing a business in the process of restructuring. CNBC spoke with multiple people familiar with the company and Neumann’s offer. They requested anonymity so they could speak freely about private matters.

One of the parties interested in financing the acquisition is investment firm Rithm Capital, which acquired Daniel Och’s Sculptor Capital Management in November, sources told CNBC. Rithm’s involvement is still preliminary and the due diligence process is still at a very early stage, a person familiar with the matter said.

More broadly, people familiar with the matter said they were skeptical that Neumann would commit funds to support the acquisition proposal. Sources said this is because Neumann mentioned other sources of financing in previous communications with WeWork advisers, but they have not yet materialized.

For example, Neumann’s lawyers previously cited Dan Loeb’s third point in a letter to WeWork’s bankruptcy counsel, describing it as a company providing financing. But the hedge fund quickly denied involvement and said the discussions were preliminary. People familiar with the matter told CNBC that Third Point was not involved in any takeover bid.

Baupost Group was also listed as a potential financing source a few months ago but did not join Neumann’s latest offer, people familiar with the matter said. One source said the conversations between Neumann and Baupost were preliminary and informal.First published by the Financial Times report Baupost was not involved.

WeWork declined to comment for this story. The company said in a previous statement that it “regularly receives expressions of interest from third parties” and is committed to “always acting in the best long-term interests of the company.”

A spokesman for Neumann declined to comment. In a previous statement, the representative said that “a consortium of six financing partners, whose identities are known to WeWork and its advisors, submitted potential bids for the company.”

Newman is represented by Alex Spiro of law firm Quinn Emanuel, who is also an adviser to the Tesla CEO Elon Musk and billionaire rapper Jay-Z.But Neumann once called JPMorgan Chief Executive Jamie Dimon’s “personal banker” does not appear to have hired a banker or financial adviser in the acquisition of WeWork, two people with direct knowledge of the matter said.

Andreessen Horowitz Reportedly invested $350 million in Flow In 2022, venture capital firm co-founder Marc Andreessen sits flow board. Andreessen Horowitz did not respond to a request for comment.

Neumann’s attorneys are also representing Flow in WeWork’s bankruptcy proceedings. Flow and Neumann shared a spokesperson who confirmed WeWork’s bid.

The timing of Neumann’s takeover bid also raised questions about its feasibility. The acquisition was proposed two weeks ago, before the company showed a viable path out of bankruptcy, sources said.

WeWork advisers are not currently conducting a bidding process for the company and are focused on completing bankruptcy proceedings in New Jersey, sources said.

Additionally, Neumann suffered reputational damage during his later years at the company.Before WeWork After a failed IPO in mid-2019, Neumann went on a fundraising and spending spree that public market investors deemed unsustainable. Even as WeWork’s business plummeted, Neumann still reaped huge profits.