Adam Neumann aims to take over WeWork

WeWork’s founder is trying to buy it

Adam Neumann made a name for himself by turning WeWork into a cultural and business phenomenon before being ousted as a workspace operator in dramatic fashion.

But in recent months, he has been working with hedge fund mogul Dan Loeb to buy the bankrupt business, DealBook first reported.

Newman’s new real estate company Flow Global Urging WeWork to consider acquisition approach, According to a letter sent by his attorney to WeWork’s advisers on Monday. Flow, which has already raised $350 million from venture capital firm Andreessen Horowitz, disclosed in his letter that Loeb’s Third Point will help finance the deal. (Read the letter.)

Flow is acquiring WeWork and its assets, as well as offering bankruptcy financing to keep the business afloat.

But Mr. Flo’s lawyers accused WeWork of interfering with the company for months. Lawyers led by Quinn Emanuel’s Alex Spiro, who also represents Elon, said “WeWork failed to even provide information to our client in what was supposed to be a value-maximizing transaction for all stakeholders.” I am writing this letter to express my regrets.” Musk and Jay-Z.

This is WeWork’s latest twist. Over its 14-year history, it has become a symbol of venture capital excess. The company grew rapidly, becoming the largest tenant in many major cities, and reaching a paper valuation of $47 billion. And Mr. Neumann, with billions of dollars in backing from Japanese tech giant SoftBank, is increasingly touting it as a way to “raise global consciousness.”

But Mr. Neumann resigned as CEO in 2019 after WeWork’s failure to go public, largely due to investor concerns about its business model and corporate governance. The company began to struggle and repeatedly sought to renegotiate its lease and cut costs. (It’s unclear whether WeWork stakeholders would be comfortable selling the company back to someone they see as causing the problem.)

WeWork filed for bankruptcy in November of this year. In a reorganization plan filed in bankruptcy court on Sunday, the company said it has more than $4 billion in secured debt alone and counts SoftBank among its major creditors. At Monday’s court hearing, lawyers for the landlords complained that WeWork may not have enough funds to pay rent.

Some experts have suggested that WeWork could be sold for a portion of its outstanding debt, perhaps for at least $500 million.

Mr. Neumann has been seeking an investment in WeWork for years. The letter said he tried to arrange “up to $1 billion in financing to stabilize WeWork” in October 2022. But the company’s CEO at the time “abandoned that process without explanation,” the lawyers wrote.

When WeWork filed for Chapter 11, Newman said at the time, “With the right strategy and team, WeWork can successfully stand up through reorganization.” But he also said Flow, which focuses on the residential real estate market, would “compete with or partner with” his former company.

In a letter sent Monday, Flow’s lawyers wrote that the combined calculations for the two companies dwarf WeWork’s standalone value “in a hybrid work environment where demand for WeWork’s products is expected to be greater than ever.” There is a possibility that it will be significantly exceeded.”

what’s happening here

A delegation from the Ministry of Finance heads to Beijing for economic negotiations. U.S. officials will hold a two-day meeting with their Chinese counterparts to discuss issues such as government subsidies, China’s role as a creditor to developing countries and the countries’ macroeconomic outlook. The talks could pave the way for Treasury Secretary Janet Yellen’s second visit to Beijing in a few years.

Mortgage interest rates are over 7%. The average interest rate on a 30-year fixed mortgage hit 7.04% on Monday for the first time since December, after better-than-expected employment and manufacturing data. The average remains below the 20-year high of 8% set in October. Mark Zandi, Moody’s chief U.S. economist, said: recently predicted If interest rates return to those levels, it would hurt President Biden’s re-election chances, even if the economy recovers.

Novo Nordisk’s parent company has signed a deal to increase production of the weight loss drug. Novo Holdings has agreed to buy Catalent, a major pharmaceutical subcontractor that fills injection pens, for $16.5 billion to meet demand for the treatments Wigovy and Ozempic.

Meta’s oversight board is pushing for changes to the social media giant’s rules regarding manipulated media. The board allowed a doctored video to be published online that falsely depicted President Biden’s inappropriate behavior, while calling on the tech giants to change their “disjointed” policies on the issue. The Oversight Committee cited the potential impact such fake videos could have on elections as the reason for taking action.

Saudi advisors head to the hills

Some of the most powerful bankers and consultants with ties to Saudi Arabia, including executives from McKinsey and Teneo, are scheduled to appear before Congress on Tuesday as part of a Senate investigation into Saudi Arabia’s growing influence in U.S. business.

Advisors and deal makers are caught between Washington and Riyadh. Sen. Richard Blumenthal, D-Conn., launched an investigation last year after the PGA Tour entered into a preliminary agreement with LIV Golf, a breakaway event backed by Saudi Arabia’s Public Investment Fund, known as PIF. (The possibility of a partnership is in doubt after the PGA Tour announced a new potential U.S. investor last week.)

Here’s what’s set to display:

• Michael Klein of Klein & Company, a veteran Wall Street trader known for his close ties to the Middle East and PIF, including advising on Saudi Aramco’s IPO, said:

• Bob Sternfels, a global managing partner at McKinsey who is advising Saudi Arabia on initiatives including the eventual establishment of LIV Golf, said:

• Paul Keeley, CEO of Teneo, which advised PIF on its deal with the PGA Tour, said:

• And Rich Lesser, global chairman of Boston Consulting Group, whose top executives had close ties to the crown prince.

Blumenthal issued subpoenas to his advisors, asking them to speak about their work advising the kingdom on transactions. A Saudi wealth fund has sued its advisers in a Saudi court, saying they cannot divulge confidential information.

Representatives for Klein and Teneo declined to comment. BCG and McKinsey did not respond to requests for comment.

A PIF spokesperson said it was making “huge efforts” to comply with the Senate’s request for documents, but stressed that ultimately Saudi law “is entitled to be respected.” (PIF is a partner at the law firm Akin Gump, where he collaborates with Raphael Prober.)

This tug-of-war highlights the complexity of the U.S.-Saudi relationship. The appearance on Capitol Hill came just a day after Secretary of State Antony Blinken met with Saudi Crown Prince Mohammed bin Salman to try to restart negotiations on normalizing relations between Saudi Arabia and Israel.

Blumenthal is expected to claim that the consultants are hiding behind foreign contracts. “Refusing to cooperate with this subcommittee would create a dangerous and untenable precedent,” he wrote in the memo. (Blumenthal is deeply suspicious of any LIV-PGA deal.)

Executives may respond that they are bound by the lawsuit and that cooperating with the Senate investigation would put their employees in Saudi Arabia at risk.

Deal makers may be left with few options. Congress could seek criminal or civil enforcement of subpoenas in U.S. courts.

“No matter what they do, they’re going to be violating someone’s law,” Hofstra University School of Law professor Julian Khoo told Dealbook. “The answer is to follow the country you fear most.”

“Their image as a desirable employer has been completely upended.”

— Megan BiroA human resources consultant talks about a wave of layoffs at Google that employees say have hurt morale.Technology companies continue cutting work To reduce costs.The latest one is snaplaid off more than 500 workers on Monday.

The multi-billion dollar Bitcoin mystery

Just as Bitcoin is approaching a market capitalization of $840 billion and becoming mainstream in Wall Street investing, a London court is investigating a long-standing mystery in the field: the pseudonymous creator of the cryptocurrency, Satoshi Nakamoto. We are considering who this person is.

The legal battle pits a group backed by Jack Dorsey against Craig Wright. Australian computer scientist Who is expected to testify on Tuesday. Wright claims that he is Satoshi, as the creator has become known, and that he owns the intellectual property rights behind Bitcoin’s blockchain. Skeptics claim Mr. Wright is lying and are demanding that he create the private key, or cryptography, to the original stash of bitcoins, now worth about $47 billion.

Lawyers for the Crypto Open Patent Alliance, a nonprofit backed by Coinbase and Dorsey’s digital payments company Block, said in court Monday that Wright’s claims are a “blatant lie.” They are asking the court to rule that he is not Satoshi.

The story began in 2008 When a programmer named Satoshi Nakamoto published a paper on Bitcoin, a digital currency that allows people to transact through a shared electronic ledger without traditional intermediaries such as governments or banks. The idea took hold, but the identity of its creator remained unknown.

Many, including Wright, claim to be the elusive Satoshi. Wright has strengthened his case by threatening Bitcoin developers with lawsuits and filing lawsuits alleging intellectual property infringement.

Mr. Wright’s lawyer said in his opening statement Monday that the evidence would show that Mr. Wright was the author of the white paper.

A COPA representative told DealBook that Wright will present evidence that the proofs he claims are fake and were created using fonts and paper that did not exist in 2008.

Cryptocurrency companies hope this incident serves as a warning to would-be Satoshis. They also want to send a clear message to Mr. Wright. “Stop suing crypto developers because they fear their actions will drive some programmers away from developing the Bitcoin blockchain.”

speed reading

Information of sale

• Blackstone is said to be considering a takeover bid for skin care company L’Occitane, which has a market capitalization of $5.4 billion. (Bloomberg)

• Elon Musk’s xAI is reportedly touting access to the billionaire’s “masconomy” of companies in presentation materials for prospective investors. (Bloomberg)

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