Uber to bring in Japanese partner
Technology company SoftBank Group is cited as a major investor with formal tender
UBER TECHNOLOGIES plans to move ahead with a deal to bring in Japanese technology company SoftBank Group as a major investor by disclosing the pricing early next week in formal tender offers to the ride-hailing service’s investors, two people familiar with the plans said on Friday.
The start of the tender follows Uber’s disclosure on Tuesday that it covered up a 2016 data breach which compromised data of some 57 million customers and drivers. That revelation prompted governments around the world to launch probes into the breach and Uber’s handling of the matter.
The people familiar with the plans did not say how much investors would be offered for the shares, or say if the price had been cut due to the breach.
Investors will have 20 business days, or about a month, to respond to e-mails and letters to be sent early next week, said one of the sources, who declined to be named because they were not authorised to discuss terms before they are public.
SoftBank and Dragoneer Investment Group agreed on November 12 to lead a group that would invest as much as $10 billion (R138.62bn) in Uber, people familiar with the deal previously said. They plan to directly invest $1bn to $1.25bn in Uber, then buy as much as 17 percent of shares held by existing investors and employees.
Selling shareholders must be accredited investors as defined by US regulations and hold at least 10 000 shares of the firm, Uber said in ads published on Wednesday in the New York Times and Wall Street Journal.
Uber is valued at $69bn, the highest of any venture backed company.
SoftBank’s $bn direct investment in Uber is expected to be at the same valuation. Employees and existing investors will be paid a lower price for their shares in a tender that will likely take weeks to complete, people familiar with the November 12 agreement said.
Purchasers of start-up shares through secondary deals service provider SharesPost discount a company’s valuation by as much as 25 percent, depending on liquidity options and scarcity, said Rohit Kulkarni, the company’s managing director for private investment research. That would value Uber at about $52bn.
Kulkarni said he expected SoftBank to apply an “incremental discount” because of the data breach. Verizon, he noted, cut its $4.8bn Yahoo takeover offer 7 percent following disclosure at the time of breaches affecting 1 billion accounts. – Reuters