Item 8.01 Other Events
As previously disclosed, on March 25, 2021, BowX Acquisition Corp. ("BowX"),
BowX Merger Subsidiary Corp. ("Merger Sub"), a direct, wholly owned subsidiary
of BowX, and WeWork Inc. ("WeWork"), entered into an Agreement and Plan of
Merger (the "Merger Agreement") pursuant to which, among other transactions,
Merger Sub will merge with in and into WeWork (the "First Merger"), with WeWork
surviving the First Merger as a wholly owned subsidiary of BowX (WeWork, in its
capacity as the surviving corporation of the First Merger, is sometimes referred
to as the "Surviving Corporation"). As promptly as practicable and as part of
the same overall transaction as the First Merger, Surviving Corporation will be
merged with and into BowX Merger Subsidiary II, LLC ("Merger Sub II"), a
Delaware limited liability company and a direct wholly owned subsidiary of BowX
(the "Second Merger" and, together with the First Merger, the "Mergers" and,
collectively with the other transactions described in the Merger Agreement, the
"Business Combination"), with Merger Sub II being the surviving entity of the
Second Merger. In connection with the closing of the Business Combination, BowX
intends to change its name to WeWork Inc.
This Current Report (the "Current Report") is being filed to update and
supplement the definitive proxy statement/prospectus (the "Proxy Statement")
filed by BowX with the Securities and Exchange Commission (the "SEC") and
declared effective on September 20, 2021 and was sent to all BowX stockholders
as of September 14, 2021 (the record date for voting on the proposed
transaction). Terms used in this Current Report, but not otherwise defined,
shall have the meanings ascribed to such terms in the Proxy Statement.
Following the announcement of the Merger Agreement and as of the date of this
Current Report, the Company received a books and records demand from a
shareholder of the Company and provided documents in response thereto. In
addition, five demand letters have been sent by alleged stockholders of BowX
challenging the proposed Business Combination and requesting additional
disclosures. One complaint challenging the proposed Business Combination and
requesting additional disclosures, Ko v. BowX Acquisition Corp. et al,
21-CIV-03065, was filed on June 3, 2021 in the Superior Court of California, San
Mateo County, and was subsequently withdrawn on June 11, 2021.
BowX and the other named defendants deny that they have violated any laws or
breached any duties to BowX's stockholders and believe that no supplemental
disclosure is required to the Proxy Statement under any applicable law, rule or
regulation. However, solely to eliminate the burden and expense of litigation
and to avoid any possible disruption to the Merger that could result from such
litigation, BowX is providing the supplemental disclosures set forth in this
Current Report. The supplemental information contained in this Current Report
should be read in conjunction with the Proxy Statement, both of which we urge
you to read in their entireties. Nothing in this Current Report shall be deemed
an admission of the legal necessity or materiality under applicable laws of any
of the disclosures set forth herein. To the contrary, BowX specifically denies
all allegations in the shareholder letters and complaint that any additional
disclosure was or is required. BowX believes such allegations to be without
merit. To the extent that information in this Current Report differs from, or
updates, information contained in, the Proxy Statement, the information in this
Current Report shall supersede or supplement the information in the Proxy
Statement. Except as otherwise described in this Current Report or the documents
referred to, contained in or incorporated by reference in this Current Report,
the Proxy Statement, the annexes to the Proxy Statement and the documents
referred to, contained in or incorporated by reference in the Proxy Statement
are not otherwise modified, supplemented or amended.
If you have not already submitted a proxy card for use at the BowX virtual
special meeting, you are urged to do so promptly. This Current Report does not
affect the validity of any proxy card or voting instructions that BowX
stockholders may have previously received or delivered. No action is required by
any BowX stockholder who has previously delivered a proxy or voting instructions
and who does not wish to revoke or change that proxy or voting instructions.
Supplemental Disclosures to Proxy Statement
All page references are to pages in the Proxy Statement as filed by BowX with
the SEC on September 20, 2021, and terms used below, unless otherwise defined,
have the meanings set forth in the Proxy Statement.
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1. The following disclosure is inserted after the second sentence of the fourth
full paragraph on page 138, which starts "During the evening of March 22, 2021,"
as underlined below:
"UBS discussed valuation summaries of public companies that UBS determined in
its professional judgment to be comparable to WeWork as compared to WeWork's
management projections and EBITDA as of February 2021."
2. The following disclosure is inserted after the third sentence of the fifth
full paragraph on page 139, which starts "During the evening of March 24, 2021,"
as underlined below:
"UBS discussed valuation summaries of public companies that UBS determined in
its professional judgment to be comparable to WeWork as compared to WeWork's
management projections and EBITDA as of March 2021. The comparable public
companies were based on publicly available information, FactSet consensus
estimates as of March 10, 2021, from companies in the following industries:
Lodging & Resort Operators (including Marriott, Hilton, InterContinental, Accor,
Hyatt, Wyndham and Vail Resorts), Flexible Office Solutions (IWG), Real Estate
Services (including CBRE, Jones Lang LaSalle, Cushman & Wakefield, Colliers and
FirstService), Asset Light/Leased REITs (including Equinix, Iron Mountain, Lamar
and Outfront), and Industry Disruptors (including Airbnb, Uber, Carvana, Zillow,
Opendoor and Redfin). Across these industries, the range of multiples of
Enterprise Value ("EV")/2022 Estimated ("2022E") Revenue was 1.4x to 6.6x,
EV/2023 Estimated ("2023E") Revenue was 1.0x to 6.7x, EV/2022E EBITDA was 6.2x
to 18.3x, EV/2023E EBITDA was 6.8x to 15.6x. Based on WeWork's management
projections, WeWork's multiples were as follows: EV/2022E Revenue was 2.0x,
EV/2023E Revenue was 1.5x, EV/2023E existing core leased EBITDA was 8.6x, and
EV/2023E EBITDA was 6.6x."
3. The following disclosure is inserted as the seventh full paragraph on page
140:
"During the morning of August 16, 2021, BowX's board of directors held a meeting
via teleconference and representatives of Cooley and representatives of UBS
joined the meeting. At the meeting, UBS provided an update to the valuation
summary it provided in the March 24, 2021 meeting. The comparable public
companies were based on publicly available information, FactSet consensus
estimates as of August 6, 2021, from companies in the following industries:
Lodging & Resort Operators (including Marriott, Hilton, InterContinental, Accor,
Hyatt, Wyndham and Vail Resorts), Flexible Office Solutions (IWG), Real Estate
Services (including CBRE, Jones Lang LaSalle, Cushman & Wakefield, Colliers and
FirstService), Asset Light/Leased REITs (including Equinix, Iron Mountain, Lamar
and Outfront), and Industry Disruptors (including Airbnb, Uber, Carvana, Zillow,
Opendoor and Redfin). The valuation summary noted that from March 26, 2021 to
August 2021, on average, 2022E EV/EBITDA multiples increased across peer
categories by 0.5x. The range of multiples for comparable companies for EV/2022E
Revenue was 1.4x to 7.5x, EV/2023E Revenue was 1.2x to 7.0x, EV/2023E EBITDA was
7.2x to 18.4x, and EV/2024E EBITDA was 5.7x to 17.1x. Based on WeWork's
management projections as of August 2021, WeWork's multiples were as follows:
EV/2022E Revenue was 2.1x, EV/2023E Revenue was 1.6x, EV/2023E EBITDA was 7.1x,
and EV/2024E EBITDA was 4.5x."
4. The following disclosure is inserted after the second sentence of the
second full paragraph on page 124, which starts "In connection with the PIPE
Investment," as underlined below:
"BowX estimates that UBS, as lead placement agent, and PJT, as co-placement
agent, will be due an aggregate fee of approximately $15 million upon the
closing of the PIPE Financing. The entire amount of such fee is contingent upon
the closing of the PIPE Financing. This fee is based on 3% of the first
$500 million of the total gross proceeds received by BowX in connection with the
PIPE Financing. Additionally, in connection with UBS's engagement as BowX's
exclusive financial and capital markets advisor in connection with the business
combination, UBS will receive a transaction fee of $11 million that is
contingent upon the consummation of the business combination.
In the past two years, UBS has received no other fees from BowX outside of the
initial underwriting fee disclosed in the registration statement."
Additional Information and Where to Find It
This communication relates to a proposed transaction between BowX and WeWork.
This communication is not a proxy statement or solicitation of a proxy, consent
or authorization with respect to any securities or in respect of the
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potential transaction and shall not constitute an offer to sell or a
solicitation of an offer to buy the securities of WeWork, the combined company
or BowX, nor shall there be any sale of any such securities in any state or
jurisdiction in which such offer, solicitation, or sale would be unlawful prior
to registration or qualification under the securities laws of such state or
jurisdiction. No offer of securities shall be made except by means of a
prospectus meeting the requirements of the Securities Act of 1933, as amended.
BowX has filed a registration statement on
Form S-4 (Registration No. 333-256133) with the SEC, which includes a document
that serves as a prospectus and proxy statement of BowX, referred to as a proxy
statement/prospectus. The definitive proxy statement/prospectus was filed with
the SEC on September 20, 2021 and was sent to all BowX stockholders as of
September 14, 2021 (the record date for voting on the proposed
transaction). Before making any voting decision, investors and security holders
of BowX are urged to read the registration statement, the proxy
statement/prospectus and all other relevant documents filed with the SEC in
connection with the proposed transaction because they contain important
information about the proposed transaction. Investors and security holders will
be able to obtain free copies of the registration statement, the proxy
statement/prospectus and all other relevant documents filed with the SEC by BowX
through the website maintained by the SEC at www.sec.gov.
Participants in Solicitation
BowX and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from BowX's stockholders in connection with the
proposed transaction. A list of the names of the directors and executive
officers of BowX and information regarding their interests in the business
combination is set forth in BowX's registration statement on
Form S-4 (Registration No. 333-256133) filed with the SEC. Additional
information regarding the interests of such persons and other persons who may be
deemed participants in the solicitation is contained in the registration
statement and the proxy statement/prospectus. You may obtain free copies of
these documents as described in the preceding paragraph.
Forward-Looking Statements
Certain statements made in this communication are "forward looking statements"
within the meaning of the "safe harbor" provisions of the United States Private
Securities Litigation Reform Act of 1995. Such "forward-looking statements" with
respect to the proposed transaction between WeWork and BowX include statements
regarding the benefits of the transaction, the anticipated timing of the
transaction and the products and markets of WeWork. 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. Many factors could cause actual future events to differ
materially from the forward-looking statements in this communication, including
but not limited to: (i) the risk that the transaction may not be completed in a
timely manner or at all, which may adversely affect the price of BowX's
securities, (ii) the risk that the transaction may not be completed by BowX's
business combination deadline and the potential failure to obtain an extension
of the business combination deadline if sought by BowX, (iii) the failure to
satisfy the conditions to the consummation of the transaction, including the
adoption of the Merger Agreement by the shareholders of BowX, the satisfaction
of the minimum amount in the trust account following redemptions by BowX's
public shareholders and the receipt of certain governmental and regulatory
approvals, (iv) the lack of a third party valuation in determining whether or
not to pursue the proposed transaction, (v) the inability to complete the PIPE
investment, (vi) the occurrence of any event, change or other circumstance that
could give rise to the termination of the Merger Agreement, (vii) the effect of
the announcement or pendency of the transaction on WeWork's business
relationships, operating results, and business generally, (viii) risks that the
proposed transaction disrupts current plans and operations of WeWork and
potential difficulties in WeWork employee retention as a result of the
transaction, (ix) the outcome of any legal proceedings that may be instituted
against WeWork or against BowX related to the Merger Agreement or the proposed
transaction, (x) the ability to maintain the listing of BowX's securities on a
national securities exchange, (xi) the price of BowX's securities may be
volatile due to a variety of factors, including changes in the competitive and
regulated industries in which BowX plans to operate or WeWork operates,
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
104 Cover Page Interactive Data File (embedded within the Inline XBRLdocument)
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