- Preserving long-term stockholder value by adopting a
Section 382 rights plan intended to protect tax assets by reducing
the likelihood of an ownership change (as defined in the Internal
Revenue Code)
- Tax Asset Preservation Plan in effect immediately to deter any
person or group from acquiring beneficial ownership of 4.9% or more
of WeWork’s outstanding Class A common stock and compromising the
availability of WeWork’s NOLs and other tax attributes
WeWork Inc. (NYSE: WE) (“WeWork”), the leading global flexible
space provider, today announced that its Board of Directors (the
“Board”) has adopted a stockholder rights plan designed to protect
long-term stockholder value by preserving the availability of
WeWork’s net operating loss carryforwards (“NOLs”) and other tax
attributes under the Internal Revenue Code (the “Tax Asset
Preservation Plan”). The Board took this action in connection with
the various transactions announced by WeWork on March 17, 2023 to
significantly deleverage WeWork’s capital structure and bolster
liquidity by restructuring its outstanding debt and raising
additional capital (collectively, the “Specified
Transactions”).
As of December 31, 2021, WeWork had approximately $6.9 billion
of U.S. federal NOLs and $6.6 billion of state NOLs that could be
available to offset its future federal taxable income and state
taxable income, respectively. WeWork’s ability to use these NOLs
and other U.S. tax assets would be substantially limited if it
experienced an “ownership change” within the meaning of Section 382
of the Internal Revenue Code (the “Code”). In general, a company
would undergo an ownership change if its “5-percent shareholders”
(determined under Section 382 of the Code) increased their
ownership of the value of such company’s stock by more than 50
percentage points over a rolling three-year period. The Tax Asset
Preservation Plan is intended to reduce the likelihood of such an
“ownership change” at WeWork by deterring any person or group from
acquiring beneficial ownership of 4.9% or more of WeWork’s
outstanding Class A common stock.
The Tax Asset Preservation Plan is similar to those adopted by
numerous other public companies with significant NOLs and/or other
tax assets. The Tax Asset Preservation Plan is not designed to
prevent any action that the Board determines to be in the best
interests of WeWork and its stockholders, and will help to ensure
that the Board remains in the best position to discharge its
fiduciary duties.
Under the Tax Asset Preservation Plan, rights will initially be
transferable only with the underlying shares of WeWork’s Class A
common stock and Class C common stock. The rights will generally
become exercisable only if a person (or any persons acting as a
group) acquires 4.9% or more of WeWork’s outstanding Class A common
stock. If the rights become exercisable, all holders of rights
(other than any triggering person) will be entitled to acquire
shares of Class A common stock (or in the case of holders of Class
C common stock, shares of Class C common stock) at a 50% discount
or WeWork may exchange each right held by holders of Class A common
stock for one share of Class A common stock (and in the case of
holders of Class C common stock, each right would be exchanged for
one share of Class C common stock). All holders of partnership
units in The We Company Management Holdings L.P. (other than any
triggering person) will be treated equitably vis-à-vis the holders
of the Class A common stock if the rights become exercisable.
Under the Tax Asset Preservation Plan, any person that currently
owns 4.9% or more of WeWork’s Class A common stock may continue to
own its shares of Class A common stock but may not acquire any
additional shares of Class A common stock without triggering the
Tax Asset Preservation Plan. Also under the Tax Asset Preservation
Plan, partnership units in The We Company Management Holdings L.P.
and shares of WeWork’s Class C common stock are not treated as
“beneficially owned” when determining whether a person owns 4.9% or
more of WeWork’s Class A common stock. Therefore, the exchange of
any partnership units (and the corresponding shares of WeWork’s
Class C common stock) into shares of WeWork’s Class A common stock
would trigger the Tax Asset Preservation Plan to the extent the
Class A common stock received upon exchange (i) increases the
ownership of a 4.9% or greater holder of WeWork’s Class A common
stock by even one additional share or (ii) increases the ownership
of a holder of WeWork’s Class A common stock to 4.9% or greater of
the outstanding shares of WeWork’s Class A common stock. The Board
has the discretion to exempt any person or group as well as any
transaction from the provisions of the Tax Asset Preservation
Plan.
The Tax Asset Preservation Plan took effect on April 7, 2023 and
is scheduled to continue in effect until April 6, 2024, unless
terminated earlier in accordance with its terms.
Additional information about the Tax Asset Preservation Plan
will be available on a Current Report on Form 8-K to be filed by
WeWork with the U.S. Securities and Exchange Commission (the
“SEC”).
About WeWork
WeWork (NYSE: WE) was founded in 2010 with the vision to create
environments where people and companies come together and do their
best work. Since then, we’ve become one of the leading global
flexible space providers committed to delivering technology-driven
turnkey solutions, flexible spaces, and community experiences. For
more information about WeWork, please visit us at wework.com.
NO OFFER OR SOLICITATION
This communication is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote or approval in any jurisdiction in
connection with the Specified Transactions or otherwise, nor shall
there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. In particular,
this communication is not an offer of securities for sale into the
United States. No offer of securities shall be made in the United
States absent registration under the Securities Act of 1933, as
amended, or pursuant to an exemption from, or in a transaction not
subject to, such registration requirements.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE
SEC
In connection with the Specified Transactions, and certain
stockholder approvals, WeWork filed with the SEC a preliminary
proxy statement. The proxy statement is in preliminary form, and
WeWork intends to file a definitive proxy statement (as amended or
supplemented from time to time, the “proxy statement”). BEFORE
MAKING ANY VOTING DECISION, WEWORK’S STOCKHOLDERS ARE URGED TO READ
THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS FILED OR TO BE
FILED WITH THE SEC IN CONNECTION WITH THE SPECIFIED TRANSACTIONS
AND CERTAIN STOCKHOLDER APPROVALS, OR INCORPORATED BY REFERENCE IN
THE PROXY STATEMENT (IF ANY) CAREFULLY AND IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE SPECIFIED TRANSACTIONS AND CERTAIN
STOCKHOLDER APPROVALS, AND THE PARTIES TO THE SPECIFIED
TRANSACTIONS. WeWork’s stockholders and investors will be able to
obtain, without charge, a copy of the proxy statement and other
relevant documents filed with the SEC (when available) from the
SEC’s website at www.sec.gov. WeWork stockholders and investors
will also be able to obtain, without charge, a copy of the proxy
statement and other relevant documents (when available) by
directing a written request to WeWork Inc., 75 Rockefeller Plaza,
10th Floor, New York, NY 10019, Attention: Investor Relations or
from WeWork’s website, www.investors.wework.com.
PARTICIPANTS IN THE SOLICITATION
WeWork and certain of its directors and executive officers and
employees may be considered participants in the solicitation of
proxies from the stockholders of WeWork in respect of certain
stockholder approvals. Information regarding the persons who may,
under the rules of the SEC, be deemed participants in the
solicitation of the stockholders of WeWork in respect of certain
stockholder approvals, including a description of their direct or
indirect interests, by security holdings or otherwise, is available
in WeWork’s preliminary proxy statement, which was filed with the
SEC on April 3, 2023, and will be set forth in WeWork’s definitive
proxy statement. Information regarding WeWork’s directors and
executive officers is also contained in WeWork’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2021 and its Proxy
Statement on Schedule 14A, dated April 7, 2022, which are filed
with the SEC, and certain of WeWork’s Current Reports on Form 8-K,
filed with the SEC on May 26, 2022, June 27, 2022, August 11, 2022,
December 2, 2022, February 7, 2023, February 21, 2023, and March
17, 2023.
FORWARD-LOOKING STATEMENTS
Certain statements made herein may be deemed “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, as amended, including any statements regarding
the Specified Transactions. These forward-looking statements
generally are identified by the words “believe,” “project,”
“expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,”
“opportunity,” “plan,” “pipeline,” “may,” “should,” “will,”
“would,” “will be,” “will continue,” “will likely result,” and
similar expressions. Forward-looking statements are predictions,
projections and other statements about future events that are based
on current expectations and assumptions and, as a result, are
subject to risks and uncertainties. Although WeWork believes the
expectations reflected in any forward-looking statement are based
on reasonable assumptions, it can give no assurance that its
expectations will be attained, and it is possible that actual
results may differ materially from those indicated by these
forward-looking statements due to a variety of risks, uncertainties
and other factors. Such factors include, but are not limited to,
the terms of the Specified Transactions, which are highly
uncertain; WeWork’s ability to complete the Specified Transactions
on the terms contemplated or at all; WeWork’s ability to obtain the
required stockholder approvals; WeWork’s ability to otherwise
refinance, extend, restructure or repay outstanding debt; its
outstanding indebtedness; its current and projected liquidity needs
to operate its business and execute its strategy, and related use
of cash; its ability to raise capital through equity issuances,
asset sales or the incurrence of debt; WeWork’s expectations
regarding its ability to continue as a going concern; retail and
credit market conditions; higher cost of capital and borrowing
costs; impairments; changes in general economic conditions,
including as a result of the COVID-19 pandemic, the conflict in
Ukraine and disruptions in the banking sector, and the impact of
such conditions on WeWork and its customers; WeWork’s expectations
regarding its exits of underperforming locations, including the
timing of any such exits and ability to retain its members; delays
in customers and prospective customers returning to the office and
taking occupancy, or changes in the preferences of customers and
prospective customers with respect to remote or hybrid working, as
a result of the COVID-19 pandemic leading to a parallel delay, or
potentially permanent change, in receiving the corresponding
revenue; the impact of foreign exchange rates on WeWork’s financial
performance; and WeWork’s inability to implement its business plan
or meet or exceed its financial projections. Forward-looking
statements speak only as of the date they are made. WeWork
discusses these and other risks and uncertainties in its annual and
quarterly periodic reports and other documents filed with the SEC.
WeWork undertakes no duty or obligation to update or revise these
forward-looking statements, whether as a result of new information,
future developments, or otherwise, except as required by law.
Source: We Work Category: Investor Relations
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230404006065/en/
Investor Relations: Kevin Berry investor@wework.com Press:
Nicole Sizemore press@wework.com
WeWorks (NYSE:WE)
Historical Stock Chart
From Jun 2024 to Jul 2024
WeWorks (NYSE:WE)
Historical Stock Chart
From Jul 2023 to Jul 2024