SOFTBANK-LED GROUP GROWS UBER STAKE
Consortium led by Japanese conglomerate to invest US$9b for 17.5pc of startup
UBER Technologies Inc shareholders agreed to sell a sizable stake in the ride-hailing 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.
The transaction implies a US$48 billion (RM194.7 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 US$1.25 billion directly into the San Franciscobased business, at a higher valuation of US$69 billion.
“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,” said an Uber spokesman on Thursday in an emailed statement.
Existing backers with more than 20 per cent of Uber shares tendered their stakes, and about US$9 billion is being invested in the overall deal. The SoftBankled group will end up owning roughly 17.5 per cent of the startup, with SoftBank at 15 per cent holding the largest stake.
“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 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 outsize 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 co-founder and former chief executive officer (CEO) Travis Kalanick.
Dara Khosrowshahi has been a champion of SoftBank’s proposal since taking over as CEO 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 ridehailing option in China, recently said it raised another round of financing from SoftBank, this time topping US$4 billion.
For SoftBank, the deal will make founder Masayoshi Son an influential investor across the ride-hailing sector. He will hold stakes in five of the world’s biggest startups, including the market leaders in China, India, Southeast Asia, Brazil and the United States.
He may use his influence to encourage mergers among the competitors in certain countries. Bloomberg