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SoftBank Group CEO Masayoshi Son. Photo: Tomohiro Ohsumi/Getty Images

SoftBank has officially pulled the plug on its $3 billion tender offer for WeWork shares, which was agreed to last fall and scheduled to close yesterday.

Why it matters: This is money that was all but promised to early WeWork employees and investors, some of whom may have made major financial decisions based on its receipt. The snarkier coverage may focus on the $970 million that former WeWork CEO Adam Neumann "lost," but that shouldn't obscure where the bulk of the money was to go.

Balance sheet: None of the $3 billion was designated for WeWork itself, but there was $1.1 billion of debt financing contingent on the tender closing. SoftBank still could provide the $1.1 billion, but is no longer obligated to do so, thus giving WeWork less financial flexibility at a time when its co-working model is anathema to public health.

The bottom line: SoftBank says its decision was based on WeWork not meeting all of the closing conditions, including "at least one" antitrust approval, plus the launch of both civil and criminal investigations that could create material liabilities.

  • It is worth noting that SoftBank had two directors on the WeWork board prior to the tender agreement, and subsequently installed one of its own executives, Marcelo Claure, as executive chairman.

Go deeper

In photos: D.C. and U.S. states on alert for pre-inauguration violence

National Guard troops stand behind security fencing with the dome of the U.S. Capitol Building behind them, on Jan. 16. Photo: Kent Nishimura / Los Angeles Times via Getty Images

Security has been stepped up in Washington, D.C., and state capitols across the U.S. as authorities brace for potential violence this weekend.

Driving the news: Following the Jan. 6 insurrection at the U.S. Capitol by some supporters of President Trump, the FBI has said there could be armed protests in D.C. and in all 50 state capitols in the run-up to President-elect Joe Biden's inauguration Wednesday.

12 hours ago - Politics & Policy

The new Washington

Illustration: Sarah Grillo/Axios

The Axios subject-matter experts brief you on the incoming administration's plans and team.

Rep. Lou Correa tests positive for COVID-19

Lou Correa. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Rep. Lou Correa (D-Calif.) announced on Saturday that he has tested positive for the coronavirus.

Why it matters: Correa is the latest Democratic lawmaker to share his positive test results after last week's deadly Capitol riot. Correa did not shelter in the designated safe zone with his congressional colleagues during the siege, per a spokesperson, instead staying outside to help Capitol Police.

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