Uber hails deal that could lead to flota­tion

Yorkshire Post - Business - - BUSINESS -

RIDE HAIL­ING firm Uber has clinched a deal with Ja­pan’s SoftBank and San Fran­cisco’s Dragoneer on an in­vest­ment that could lead the way to its stock mar­ket flota­tion in 2019.

It is un­der­stood that a con­sor­tium led by the two firms is set to build an ini­tial stake worth around £764m be­fore buy­ing fur­ther shares from ex­ist­ing share­hold­ers and Uber em­ploy­ees that would bring its hold­ing to around 14 per cent. The move would also pave the way for the com­pany’s muchawaited stock mar­ket flota­tion by the end of 2019.

Uber con­firmed in a state­ment that an agree­ment had been struck, but did not pro­vide fur­ther de­tails.

“We’ve en­tered into an agree­ment with a con­sor­tium led by SoftBank and Dragoneer on a po­ten­tial in­vest­ment,” Uber said. “We be­lieve this agree­ment is a strong vote of con­fi­dence in Uber’s long-term po­ten­tial.

“Upon clos­ing, it will help fuel our in­vest­ments in tech­nol­ogy and our con­tin­ued ex­pan­sion at home and abroad, while strength­en­ing our cor­po­rate gov­er­nance.”

Uber is cur­rently val­ued at around £52.4bn, but re­ports sug­gest that the stock of­fers would be based on a lower val­u­a­tion, mak­ing the to­tal value of the multi­bil­lion-dol­lar deal un­clear.

But Richard Wind­sor, an an­a­lyst at Edi­son In­vest­ment Re­search, said it will help raise con­fi­dence in the ride hail­ing firm which has suf­fered a num­ber of blows over the course of the last year.

“The deal also goes hand in hand with agree­ments to re­struc­ture Uber’s cor­po­rate gov­er­nance in a bid to draw a line un­der the dis­as­trous 2017 that Uber has had,” Mr Wind­sor said.

“This is badly needed as man­age­ment turnover, bad press, un­happy driv­ers and a se­ries of scan­dals has led to the com­pany fo­cus­ing on any­thing but its core busi­ness in 2017.

“This has re­sulted in a mean­ing­ful de­te­ri­o­ra­tion of its mar­ket po­si­tion and out­look in our opin­ion.”


BOOK­ING IN: Uber’s deal with SoftBank and Dragoneer could help to raise con­fi­dence in the firm which has suf­fered a num­ber of set­backs this year.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.