SoftBank’s chief legal officer, Rob Townsend, said in a statement on Thursday that the share purchase was subject to certain conditions agreed to in October.
“Several of those conditions were not met, leaving SoftBank no choice but to terminate the tender offer,” he said.
WeWork declined to comment. However, the special committee of WeWork’s board said in a statement on Wednesday that it “is surprised and disappointed” by SoftBank’s move. It added that it will evaluate all legal options, including litigation.
At an earnings presentation last month, Son boasted about a turn around plan that would see WeWork generating positive cash flow in a couple of years.
But the global coronavirus pandemic has thrown a huge spanner in the works.
Sweeping restrictions on work, travel and social distancing aimed at preventing the spread of the virus are putting both WeWork and SoftBank under enormous pressure.
WeWork is suffering, as major cities where it operates shut down for weeks on end. It still has to pay long-term leases, even if businesses squeezed by the outbreak cancel contracts with the shared office space company.
While SoftBank’s planned stock buyout wouldn’t have provided WeWork with any additional cash, the startup will lose out on $1.1 billion in debt financing that was contingent on the deal closing, according to a letter WeWork sent to investors last week, a copy of which was shared with CNN Business.
SoftBank and its Vision Fund have committed more than $14.25 billion to WeWork to date, including $5.45 billion since October 2019.
The coronavirus pandemic poses a catastrophic threat for many of the startups CEO Son has plowed money into through the $100 billion Vision Fund. In an effort to rescue SoftBank’s plummeting share price, Son last week made the surprise announcement of what amounts to a fire sale of $41 billion worth of assets to buy back shares and reduce the company’s heavy debt load.