SoftBank says Benchmark, Menlo Ventures ready to sell some Uber stock
SAN FRANCISCO: A consortium led by SoftBank Group Corp launched its tender offer for shares of Uber Technologies Inc and the Japanese company said that some notable early Uber investors planned to sell stock.
Venture capital firms Benchmark, which owns 13 per cent of Uber worth nearly US$9 billion, and Menlo Ventures, another large shareholder, have indicated that they would sell a portion of the shares, according to a SoftBank spokesperson.
Shawn Carolan, managing director at Menlo Ventures and who leads the firm’s Uber investment, confirmed that the firm “is in favour of the transaction, and will be tendering some of our shares.”
How many it sells, though, depends on the final price SoftBank is willing to pay, he said.
Benchmark declined to comment.
The SoftBank investment would be a sign of support from an influential investor as the ride-services company struggles with several scandals ranging from sexual harassment allegations to federal criminal probes.
The investment, if successful, would trigger governance changes at Uber, including expanding the board from 11 to 17 members, limiting some early shareholders’ voting power and slashing the control wielded by former chief executive Travis Kalanick.
SoftBank would add the investment in Uber to several other bets in the sector, including Singapore’s Grab and India’s Ola.
It is offering to buy Uber shares from existing investors at a valuation of US$48 billion, a 30 per cent discount to the most recent valuation of US$68.5 billion, a person familiar with the matter said earlier this week.
However, SoftBank can still increase the price to encourage more people to sell their shares.
It also would buy US$1 billion of new stock at the higher, US$68.5 billion valuation but only if it can accumulate at least a 13.4 per cent share of Uber through the tender, another person familiar with the matter said on Tuesday.
If there were not enough sellers, SoftBank could walk away from the deal.
Uber said late on Tuesday that the expected tender had launched.
The investment comes at the end of a year of controversy and change for Uber, including the announcement last week that the company covered up a major hack in 2016.
One of the people familiar with the matter said that some initial members of the SoftBank consortium, including General Atlantic, had dropped out over concerns including the price. — Reuters