Investors agree to sell shares in deal led by SoftBank

Uber Technologies Inc. shareholders agreed to sell a sizable stake in the ridehailing leader to an investor group led by SoftBank Group Corp., allowing the Japanese conglomerate to amass a piece of the company at a steep discount to the last valuation.

“We look forward to working with the purchasers to close the overall transaction, which we expect to support our technology investments, fuel our growth, and strengthen our corporate governance,” an Uber spokesman said Thursday in an emailed statement.

The transaction implies a US$48-billion value for Uber, according to a person familiar with the deal. The investor group, which includes SoftBank, Dragoneer Investment Group, TPG, Tencent Holdings Ltd. and Sequoia Capital, also will put another US$1.25 billion directly into the San Franciscobased business, at a higher valuation of US$69 billion, according to the person, who asked not to be named because the transaction isn’t yet complete.

“We are appreciative of the support from Uber’s shareholders in the successful tender offer and look forward to closing the overall investment in January,” said Rajeev Misra, head of SoftBank’s US$93 billion tech investment fund. “We have tremendous confidence in Uber’s leadership.”

The deal will make SoftBank one of Uber’s largest shareholders and comes with two board seats. Misra and Sprint Corp. chief executive Marcelo Claure have long been viewed as likely candidates to fill those positions. (SoftBank owns most of Sprint). The transaction will also put in motion a slate of governance reforms at Uber that were dependent on the deal going through, which will expand the board to 17 and revoke outsized voting power given to early backers. Benchmark, Uber’s largest venture capital backer, will also drop a legal case it’s pursuing in arbitration against former co-founder and chief executive Travis Kalanick.

SoftBank had been seeking a stake of at least 14 per cent in the deal. The Wall Street Journal reported at least 20 per cent of Uber’s shares had been tendered.

Dara Khosrowshahi has been a champion of SoftBank’s proposal since taking over as chief executive in September.

In addition to the governance reforms, he’s looking to appease early employees and investors who don’t want to hold onto their shares until 2019, when Uber is expected to conduct an initial public offering.

It would also give the business some additional capital to beat back rivals, which have gained steam after a succession of setbacks for Uber.

Didi Chuxing, the main ride-hailing option in China, recently said it raised another round of financing from SoftBank, this time topping US$4 billion.