Wall Street Journal 08_04_2020

THE WALL STREET JOURNAL. **** Wednesday, April 8, 2020 |B3

stead, it has raised money pri-

vately at a lower valuation

than the $31 billion price tag

of its last 2017 fundraising

round, the people close to the

company said.

The $1 billion of debt

comes with a steep price tag;

an interest rate of 10% plus a

benchmark rate known as the

London interbank offered rate,

or Libor, the people familiar

with the deal said.

The investors have also ex-

tracted verbal commitments

from the company to reduce

significantly its fixed costs

and to strengthen its manage-

ment, adding at least one new

executive to support Chief Ex-

ecutive Brian Chesky, the peo-

ple said.

A spokeswoman for Silver

Lake said, “We made this in-

vestment because we believe

in Airbnb’s leadership, begin-

ning with Brian, and look for-

ward to partnering with them

in our role as a strategic in-

vestor.”

In a joint statement Silver

Lake and Sixth Street said of

the possibility of bringing in

another executive: “There was

no such ask or commitment

and in fact a major part of our

decision to invest was because

of our confidence in the lead-

ership of the company.”

AirbnbInc. agreed to pay

its new investors interest at a

rate of more than 10% and to

strengthen its leadership, in

return for the $1 billion in ad-

ditional funding announced

Monday, according to people

familiar with the matter.

The investors will also get

warrants that can be con-

verted into shares with a valu-

ation for the company of $18

billion, a drop of almost half

since Airbnb’s last fundraising

in 2017, the people said.

The terms of the financing,

which haven’t been previously

reported, show the distress

the home-sharing company is

under due to the coronavirus

pandemic.

Airbnb said on Monday that

it raised $1 billion in funding

from private-equity firms Sil-

ver Lake and Sixth Street Part-

ners to bolster its finances, af-

ter the coronavirus pandemic

upended its business model.

The San Francisco-based

company has also had prelimi-

nary discussions with several

investors about raising more

capital, one person close to

the negotiations said.

Airbnb had planned to start

trading publicly this year. In-

BYJEANEAGLESHAM

ANDKIRSTENGRIND

Airbnb to Pay Over

10% Interest for

$1 Billion Financing

disrupted domestic and inter-

national operations,” the com-

pany said, referring to the ill-

ness caused by the

coronavirus.

The restaurant industry has

been hit hard by the pan-

demic. Governments have im-

posed new rules requiring op-

erators to close dining areas.

Many restaurants have pivoted

to pickup and delivery options.

Darden said it has been able

to boost to-go sales at Olive

Garden and at its LongHorn

Steakhouse business.

For the week ended April 5,

Olive Garden generated

$39,133 in to-go sales per res-

taurant, more than double the

$15,500 in to-go sales per res-

taurant the chain generated

for the week that ended March

8. LongHorn’s sales more than
   tripled to $19,858 per restau-
   rant over the same time frame.
   Denny’s said the vast ma-
   jority of restaurants that are
   part of its system continue to
   operate, offering takeout or
   delivery.

Darden Restaurants Inc.

andDenny’sCorp. said their

sales have plummeted in re-

cent weeks, highlighting the

threat casual restaurant chains

face as their dining rooms re-

main closed amid restrictions

meant to halt the spread of

the new coronavirus.

Darden, the operator of Ol-

ive Garden and other restau-

rants, said Tuesday that com-

parable sales across its

portfolio fell 39% during the

first six weeks of its current

quarter, a period that ended

April 5. Comparable sales were

down at least 71% for each of

the last three weeklong peri-

ods, the company said.

Denny’s said same-store

sales across its portfolio in the

domestic market dropped 19%

in March compared with

March of last year.

“The global Covid-19 pan-

demic and various related gov-

ernment mandates restricting

dine-in restaurant service has

BYMICAHMAIDENBERG

Darden, Denny’s Try

To Pivot to Takeout

network exclusive rights to air

UFC fights and added on rights

to pay-per-view fights.

The UFC took on debt when

it was bought by media com-

pany Endeavor PLC and pri-

vate-equity firmsKKR&Co.

and Silver Lake.

A spokesman for the UFC

declined to comment. ESPN re-

ferred queries to the UFC.

The last UFC card, held

March 14 in Brazil, went ahead

with a stripped-down crew and

no live audience after local au-

thorities limited gatherings to

150 people at most.

Unlike many other sports

leagues, the UFC needs just a

few people to put on a

match—two fighters, their

coaches and a camera crew.

The UFC’s anything-goes ethos

means a match can be held

pretty much anywhere.

Still, finding venues for

coming bouts hasn’t been easy.

The UFC was in talks to move

two events scheduled for

March and April in Ohio and

Oregon, respectively, to its

UFC Apex production center in

Las Vegas. But in March, the

Nevada Athletic Commission

voted against allowing the

events to take place.

The next event is scheduled

for April 18 but the UFC has

scrambled to find a location

without running afoul of rules

in a growing number of coun-

tries aimed at curbing the

spread of the coronavirus. The

event was slated for the Bar-

clays Center in Brooklyn until

New York state banned all

public gatherings last month.

The headline match will pit

Tony Ferguson against fellow

American Justin Gaethje for

the lightweight belt. Mr.

Gaethje takes the place of

lightweight champion Khabib

Nurmagomedov, a native of

Russia’s Dagestan region, who

pulled out.

In response to questions

about the status of the fight,

Mr. White said Monday on

Twitter that it would proceed.

“The fight is signed and is

100% ON LIVE on ESPN some-

where on EARTH!!!!” Mr. White

tweeted.

Mr. White said later in an

interview with ESPN that he

has secured a U.S. location and

a private island to hold fights.

Mixed-martial-arts fighters

are split on whether to fight or

not, said Felicia Spencer, a

professional fighter scheduled

for a bout next month.

“Fighters who expect to be

in a match have a mentality

that ‘I’m gonna get there and

do it no matter what the ob-

stacles are,’ ” Ms. Spencer

said. “But fighters who are not

lined up for a match are won-

dering, ‘Shouldn’t these fights

be postponed?’ ”

Ms. Spencer, who goes by

the name Feenom, is scheduled

to fight in Florida, her home

state, where Gov. Ron DeSantis

issued a stay-at-home order

last week. She said she would

prefer not to have to fly dur-

ing the pandemic.

The coronavirus pandemic

has forced sports leagues

around the world to shut

down, but the company behind

the Ultimate Fighting Champi-

onship has vowed to keep

holding fights for cable and

pay-per-view audiences.

UFC Holdings Inc. Presi-

dent Dana White, a friend of

President Trump, said in mid-

March that the company would

keep running events despite

the outbreak—and he hasn’t

changed his mind since.

The decision has been

cheered by the debt markets,

where the prices for more than

$2 billion of UFC debt recently

rebounded from distressed

levels.

Behind efforts to keep UFC

fights going are the company’s

$1.5 billion contract with ESPN

and $2.3 billion in debt the

UFC took on in recent years.

The deal with ESPN, a unit of

Walt DisneyCo., gives the

BYSOMABISWAS

UFC Vows to Keep Fighting—

Assuming It Can Find Arenas

The last UFC card, held March 14 in Brazil featuring Kevin Lee (left) and Charles Oliveira, went ahead with no live audience.

BUDA MENDES/ZUFFA/GETTY IMAGES

of WeWork’s parent, We Co., by

the special committee of We-

Work’s board of directors. The

board is made up of Benchmark

general partner Bruce Dunlevie

and former Coach Inc. CEO

Lewis Frankfort.

In a statement, the commit-

tee said pulling the offer is a

breach of contract “as well as a

breach of SoftBank’s fiduciary

obligations to WeWork’s minor-

ity stockholders, including hun-

dreds of current and former

employees.”

In a statement, a SoftBank

spokeswoman called the law-

suit a “mistaken attempt to

force SoftBank to purchase

their shares when it is not le-

gally obligated to do so.” A We-

Work spokeswoman declined to

comment.

The committee said that We-

Work’s “liquidity could also be

adversely affected by Soft-

Bank’s refusal” to complete the

offer because $1.1 billion in

debt financing depended on the

deal closing, according to the

complaint.

The tender offer, agreed in

October, was part of a bailout

that saw SoftBank pump bil-

lions into the company and Mr.

Neumann cede control follow-

ing a failed attempt at an initial

public offering. The Wall Street

Journal first reported in March

that SoftBank was backing

away from the deal. The Japa-

nese conglomerate told We-

Work shareholders at the time

that it believed government

probes into WeWork, including

those from the Securities and

Exchange Commission and the

Justice Department, allowed it

to terminate the offer.

SoftBank has said that less

than $300 million from the of-

fer was allotted to current em-

ployees, and former employees

were also hoping for a windfall.

Two WeWork directors filed

a lawsuit against SoftBank

GroupCorp. on behalf of the

co-working company after the

Japanese conglomerate backed

away from a deal to buy up to

$3 billion in WeWork’s shares.

The stock purchase would

have been a major windfall for

WeWork’s former chief execu-

tive, Adam Neumann, who had

the right to sell up to $970 mil-

lion in shares, as well as inves-

tors and numerous current and

former employees.

SoftBank said last week that

it terminated the offer on its

April 1 deadline, citing “multi-

ple, new and significant pend-

ing criminal and civil investiga-

tions” into WeWork that it

claimed came to light after it

agreed to the offer in October.

The lawsuit was filed in Del-

aware on Tuesday in the name

BYKONRADPUTZIER

WeWork Directors Sue SoftBank

Over Ditched Deal to Buy Shares

The company had planned to start trading publicly this year.

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