Adam Neumann’s bid to buy back WeWork faces uphill battle due to financing challenges

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Adam Neumann has sent a preliminary offer to buy WeWork out of bankruptcy for more than $500 million, five years after he was ousted by the office-sharing company he founded. But it's not clear that he has the financing and requisite support from creditors to consummate a deal. In trying to reclaim WeWork, Neumann has to contend with a checkered past at the company, uncertainty over funding and the difficulty in valuing a business that's midway through a restructuring process. CNBC spoke with multiple people familiar with the company and Neumann's offer. They requested anonymity to speak freely about private matters. Investment firm Rithm Capital, which acquired Daniel Och's Sculptor Capital Management in November, is one of parties interested in financing the bid, sources told CNBC. Rithm's involvement remains preliminary and the diligence process is at an extremely early stage, one of the people said. More broadly, people close to the matter say they're skeptical of whether Neumann has committed financing lined up to support an offer. That's because Neumann has previously named other financing sources in prior communications with WeWork's advisors that haven't come to fruition, the sources say. For example, Dan Loeb's Third Point was previously cited in a letter by Neumann's counsel to WeWork's bankruptcy advisors as a firm that was providing financing. But the hedge fund quickly denied involvement and said discussions had only been preliminary. Third Point is not involved in any offer, people familiar with the matter told CNBC. Baupost Group also was floated as a potential financing source months earlier but didn't join Neumann's latest bid, the people said. Conversations between Neumann and Baupost were preliminary and informal, one source said. The Financial Times first reported that Baupost was not involved. WeWork declined to comment for this story. In a previous statement, the company said it received "expressions of interest from third parties on a regular basis," and that it worked to "always act in the best long-term interests of the company." A spokesperson for Neumann declined to comment. In a prior statement, the representative said "a coalition of half a dozen financing partners — whose identities are known to WeWork and its advisors — submitted a potential bid" for the company.