Temasek eyes increasing stake in WeWork China

This will push WeWork China’s valuation to around $1.35b.

Temasek Holdings and Trustbridge Partners held talks with WeWork China to take majority ownership over the China branch of the embattled co-working startup, reports Reuters.

The plan values WeWork China at around $1.35b (US$1b), two of three sources said.

The proposal was submitted to WeWork’s major stakeholder, Japanese technology conglomerate SoftBank Group Corp, at the end of last year, said one of the sources, who asked not to be identified as the discussions are private.

WeWork currently owns 59% of WeWork China, with the remainder held by other investors including SoftBank, Hony Capital and Trustbridge, according to the group’s prospectus for its initial public offering.

The Chinese unit had raised $673.4m (US$500m) in July 2018 from investors including Temasek, Trustbridge, SoftBank and Chinese fund Hony Capital in a deal valuing the firm at about $6.73b (US$5b).

A new deal giving Temasek and Trustbridge a majority stake would likely mean that WeWork China would go through a down round - a fall in valuation following a new investment if the proposal got passed - but could significantly ease the financial burden on WeWork and SoftBank.

Here’s more from Reuters.