Uber hails deal that could lead to flotation
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.