SoftBank now Uber's largest shareholder as deal closes

SAN FRANCISCO: A group of investors led by SoftBank Group Corp closed a deal with Uber Technologies Inc, making SoftBank the largest stakeholder in the ride-services firm and providing a much-needed boost to controversy-ridden Uber.

The deal includes a large purchase of shares from existing Uber investors and employees at a discounted valuation for the company of $48 billion, a 30 percent drop from Uber's most recent valuation of $68 billion. These secondary stock sales will be completed by the end of the day Thursday on the Nasdaq Private Market, an Uber spokesman said.

The investor group, which is co-led by SoftBank and Dragoneer Investment Group and includes Sequoia Capital, has also completed a $1.25 billion investment of fresh cash at the other, higher valuation, the spokesman said.

In all, the investors will take a stake of about a 17.5 percent in Uber, with SoftBank keeping 15 percent, becoming the company's largest shareholder. The investment triggers a number of governance changes at Uber, including the addition of new board members, which take effect immediately.

"This is a great outcome for our shareholders, employees and customers, strengthening Uber's governance as we double down on our technology investments and continue to bring our services to more people in more places around the world," said the Uber spokesman. The official closing of the deal marks the end of a months-long process fraught with infighting among board members.

Power struggles have been fierce - an early and large investor, Benchmark Capital, sued in August to force co-founder and former CEO Travis Kalanick off the board. Meanwhile, Uber has been struggling with controversies including federal criminal probes, a massive data breach and a lawsuit claiming trade-secrets theft.