WeWork IPO postponed, deal for India unit faces delays
We Co.’s decision to postpone its much-awaited initial public offering (IPO) will also likely delay a plan to acquire majority control of its Indian affiliate to next year, said two people familiar with the development.
Earlier this year, We Co. offered to buy a 70% stake in WeWork India in a cash and stock deal that valued the company at $2.75 billion, three years after it entered the country through a brand franchise agreement. Embassy Buildcon Llp, the holding company of WeWork India that is owned by Embassy Group chairman Jitu Virwani, would hold the remaining 30% stake once the deal goes through.
A Reuters report last week said We Co. might seek a valuation between $10 billion and $12 billion for its IPO, far lower than the $47 billion valuation it achieved in January when SoftBank invested $2 billion in it. On Monday, the firm, which is backed by Japan’s SoftBank Group, said: “The We Co. is looking forward to our upcoming IPO, which we expect to be completed by the end of the year. We want to thank all of our employees, members and partners for their ongoing commitment.”
Though the offer was made by WeWork earlier this year, “the stake acquisition will only happen after it launches the IPO to raise funds”, said one of the two people cited earlier. “Since the IPO is delayed, the subsequent acquisition will now only happen after that. Embassy will continue to run the business in India as it is currently doing,” the person said, requesting anonymity.
Spokespeople for WeWork India and Embassy Group declined to comment.