New York, April 7 (SocialNews.XYZ) WeWork on Tuesday said that it has filed a lawsuit against SoftBank Group Corp after the latter withdrew its $3 billion tender offer for additional WeWork shares as agreed last year.
The lawsuit was filed in the Delaware Court of Chancery.
In a statement, The We Company, the parent company of WeWork, said that SoftBank has breached its obligations under the Master Transaction Agreement (MTA) by failing to complete the tender offer contemplated by it.
"SoftBank's failure to consummate the tender offer is a clear breach of its contractual obligations under the MTA as well as a breach of SoftBank's fiduciary obligations to WeWork's minority stockholders, including hundreds of current and former employees. The Special Committee regrets the fact that SoftBank continues to put its own interests ahead of those of WeWork's minority stockholders," it said.
WeWork alleged that instead of abiding by its contractual obligations, SoftBank, under increasing pressure from activist investors, has engaged in a purposeful campaign to avoid completion of the tender offer.
The Special Committee is seeking specific performance requiring SoftBank to complete the tender offer or, in the alternative, compensatory damages for SoftBank's breaches of contract and fiduciary duty, it said.
"We are committed to enforcing the terms of the MTA and to ensuring that SoftBank upholds its commitments to WeWork's minority stockholders," said the statement by the Special Committee of the Board of Directors of The We Company.
It also said that SoftBank has already received most of the benefits provided to it under the MTA, including broad control of WeWork and additional economic benefits, adding that SoftBank's wrongful conduct in failing to consummate the tender offer deprives WeWork's minority stockholders of the liquidity that they were promised.
"SoftBank committed to use its reasonable best efforts to pursue the roll-up of WeWork's joint venture in China. Instead, SoftBank purposefully pursued an alternative transaction with a key minority investor in the joint venture," the statement said.
Japan-based SoftBank last October announced the infusion of $5 billion into the struggling co-sharing workspace company WeWork. It had said that it would provide up to $3 billion for the existing shareholders of WeWork. The deal will see Softbank stake increasing to 80 per cent in the company.
Source: IANS
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