WeWork’s Co-Founder Is Stoked About Wells Fargo’s Seal of Approval

(Bloomberg) -- WeWork co-founder Adam Neumann has a message for anyone skittish about the company’s pending IPO: Wells Fargo backs his business.

“If Wells Fargo, the largest lender in this country, can get comfortable with this, then everybody should,” Neumann said Wednesday, referring to a $6 billion WeWork credit facility the bank is participating in. “I’m most proud of Wells Fargo coming in. Who’s here from Wells Fargo? Thank you, thank you,” Neuman said at a private education session for analysts in New York, according to a person with direct knowledge of the matter.

Under the terms of the financing, banks will have to make good on their commitments only if the initial public offering raises at least $3 billion for the New York-based venture, which rents furnished office space to companies and freelancers. San Francisco-based Wells Fargo & Co. is one of nine banks handling WeWork’s IPO and participating in the credit facility.

“The reason I’m proud of your team is you guys are not usually debt-equity story people,” Neumann told the Wells Fargo analysts who attended the session, according to the person, who asked not to be identified discussing a private meeting. “I met the decision makers in your firm and they couldn’t care less about the equity story. They only cared about one thing -- are the buildings profitable and are we getting paid back,” Neumann said.

“I’m not even sure you guys have a CEO at the moment, so it’s not easy,” he joked.

Wells Fargo is more than five months into a search for a new chief executive officer. Its previous leader, Tim Sloan, stepped down in March, and former general counsel Allen Parker has been running the bank in the interim.

Wells Fargo has long aspired to expand its corporate and investment bank. Chief Financial Officer John Shrewsberry said at an investor conference in 2018 that revenue from the business could double in five years.

WeWork’s IPO won’t be quite the celebration it once foresaw. The startup is considering seeking a valuation of about $20 billion to $30 billion, people with knowledge of the matter said. The range could end up closer to $20 billion, said one of the people, which would be less than half the valuation it secured from its biggest backer just a few months ago.

Representatives for WeWork and Wells Fargo declined to comment.

--With assistance from Hannah Levitt.

To contact the reporter on this story: Gillian Tan in New York at gtan129@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Steve Dickson

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