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Illustration: Aïda Amer/Axios

SoftBank and former WeWork CEO Adam Neumann are nearing a detente in their long-running legal battle, as first reported by WSJ and confirmed by Axios.

Why it matters: WeWork isn't a party to the litigation, but having it settled would help smooth the company's post-pandemic path, which is expected to include a second stab at the public markets.

Backstory: SoftBank in the fall of 2019 agreed to buy up to $3 billion of WeWork shares via a tender offer, as part of a broader rescue package in the aftermath of the company's failed IPO. Included was around $970 million for Neumann, who also received nearly $200 million to leave the CEO spot and give up his voting rights.

  • SoftBank bailed on the tender offer last April, arguing that WeWork hadn't met certain closing conditions.
  • SoftBank was then sued by a special committee of WeWork's board, including a representative of venture capital firm Benchmark, who claimed SoftBank just had "buyer's remorse" as COVID-19 took a blowtorch to the co-working market.
  • Neumann subsequently filed his own suit, in case a judge agreed with SoftBank that the special committee didn't have standing.

Fast forward: Sources say that the proposed settlement would apply to both lawsuits, with the $3 billion effectively cut in half.

  • SoftBank would still pay the $20 per share it had originally agreed to pay. The difference is that the number of shares it buys would be cut in around half, meaning the overall tender size shrinks from $3 billion to around $1.5 billion.
  • For Neumann, that means a $480 million payday and he retains around 75% of his current stake in the company. The rest would go to WeWork employees and investors (including Benchmark).
  • Final details are still being ironed out, with a formal announcement expected before the weekend.
  • WeWork is in advanced discussions to go public via a SPAC sponsored by Vivek Ranadivé's Bow Capital Management, per multiple sources. That deal, however, wouldn't be papered until the settlement is signed.
  • "No comments" from WeWork, SoftBank and Neumann.

The bottom line: Given everything that's transpired since SoftBank first agreed to the tender, this feels like a win for all parties.

  • SoftBank de-risks a bit on WeWork and saves itself $1.5 billion upfront. Neumann and other shareholders get paid at pre-pandemic pricing, albeit much lower than the proposed IPO mark, and get to ride any post-pandemic upside. And WeWork itself gets to move on.

Go deeper

Scoop: Fair's Scott Painter raises $30 million for new startup

Illustration: Eniola Odetunde/Axios

NextCar, a startup for car leases and subscriptions formed by TrueCar and Fair founder Scott Painter, has raised about $30 million in seed funding from investors like Reid Hoffmann and Mark Pincus, per an internal email obtained by Axios. The round was led by a private equity firm, according to a source.

Backstory: Shortly before Painter announced his new company in October, Reuters reported that he was exploring ways to buy Fair back from SoftBank Vision Fund and other backers. He resigned as CEO in October 2019.

Editor's note: The story has been updated to clarify that the company provides lease and subscriptions (not rentals).

Dave Lawler, author of World
40 mins ago - World

Americans increasingly see China as an enemy

One in three Americans, and a majority of Republicans, now view China as an enemy of the United States, according to a new survey from Pew Research Center.

By the numbers: Just 9% of Americans consider China a "partner," while 55% see Beijing as a "competitor" and 34% as an "enemy."

Scoop: Leaked HHS docs spotlight Biden's child migrant dilemma

A group of undocumented immigrants walk toward a Customs and Border Patrol station after being apprehended. Photo: Sergio Flores/The Washington Post via Getty Images

Fresh internal documents from the Department of Health and Human Services show how quickly the number of child migrants crossing the border is overwhelming the administration's stretched resources.

Driving the news: In the week ending March 1, the Border Patrol referred to HHS custody an average of 321 children per day, according to documents obtained by Axios. That's up from a weekly average of 203 in late January and early February — and just 47 per day during the first week of January.