Uber-SoftBank deal draws closer
Keeping leash on former leader is key bargaining chip
SoftBank Group Corp. has overcome a major obstacle to its planned multibillion-dollar investment in Uber Technologies Inc. The Japanese firm agreed to block any attempts to elevate Travis Kalanick, Uber’s controversial former leader, back to the company’s top ranks, according to people familiar with the discussions.
There have been no public proposals like this so far, but Kalanick has privately expressed interest in helping the company in some capacity, said the people, who asked not to be identified because negotiations are ongoing. Kalanick retains some power over Uber through his control of three board seats, though two of those remain unfilled.
The SoftBank-led investment in Uber could be the largest private stock sale in history — or it could collapse amid continued infighting. One prospective investor in the deal, Chinese ride-hailing company Didi Chuxing, has walked away, according to people familiar with the matter.
SoftBank and investment firms General Atlantic and Dragoneer Investment Group are still in active talks with Uber. Together, the firms expect to invest at least $1 billion in Uber at a $69 billion valuation, while buying as much as $9 billion in shares from existing investors. The valuation of those shares will be determined by an auction process that’s expected to start at $45 billion, the source said.
SoftBank has considered asking for two board seats as part of the deal, and has mulled one of its executives, Rajeev Misra, and Sprint Corp. Chief Executive Officer Marcelo Claure as candidates, the source said. SoftBank owns most of Sprint.
Another proposal being discussed would give SoftBank one board seat and a board observer seat. Under either proposal, it’s unclear whether Uber would create new directors or shuffle its existing eleven board seats.
Spokesmen for Uber, SoftBank, Benchmark and Kalanick declined to comment.
“We are considering, we have great interest” in Uber, SoftBank CEO Masayoshi Son said in a recent interview for The David Rubenstein Show:
Peer-to-Peer Conversations on Bloomberg Television. “We have not decided — if we decide to do it, I think it has a great future.”
The board is looking to appoint an independent chairman, a proposal all directors, including Kalanick and Uber CEO Dara Khosrowshahi, support. That was one of a series of recommendations from Eric Holder, a former U.S. attorney general who consulted for Uber after a series of scandals.
Kalanick has told acquaintances he has no intention of trying to return as CEO, but he may someday seek a position as a strategic or operational partner to Khosrowshahi, said people who have spoken with the co-founder.
Khosrowshahi has privately indicated support for a deal with SoftBank at the right price, according to one source. His other priorities include allowing employees to sell stock more easily at a fair price, resolving the fight between Kalanick and Benchmark, and leveling the playing field between shareholders with super-voting stock and those without.
Benchmark, which holds stock with outsize voting power, also supports a one-shareholder-one-vote policy. The VC firm and other investors are worried that SoftBank could help Kalanick retake the reins through the purchase of supervoting shares, the source said.