Investors sell off large stake in Uber
The arrangement will make SoftBank one of company’s largest shareholders
Uber Technologies Inc. shareholders agreed to sell a sizable stake in the ride-hailing leader to an investor group led by SoftBank Group, allowing the Japanese conglomerate to amass a piece of the company at a steep discount to the last valuation.
“We look forward to working with the purchasers to close the overall transaction, which we expect to support our technology investments, fuel our growth, and strengthen our corporate governance,” an Uber spokesman said Thursday in an emailed statement.
The transaction implies a $48 billion value for Uber, according to a person familiar with the deal. The investor group, which includes SoftBank, Dragoneer Investment Group, TPG, Tencent Holdings and Sequoia Capital, also will put another $1.25 billion directly into the San Francisco-based business, at a higher valuation of $69 billion, according to the person, who asked not to be named because the transaction isn’t yet complete.
“We are appreciative of the support from Uber’s shareholders in the successful tender offer and look forward to closing the overall investment in January,” said Rajeev Misra, head of SoftBank’s $93 billion tech investment fund. “We have tremendous confidence in Uber’s leadership.”
The deal will make SoftBank one of Uber’s largest shareholders and comes with two board seats. Misra and Sprint Corp. Chief Executive Officer Marcelo Claure have long been viewed
as likely candidates to fill those positions. (SoftBank owns most of Sprint). The transaction will also put in motion a slate of governance reforms at Uber that were dependent on the deal going through, which will expand the board to 17 and revoke outsize voting power given to early backers. Benchmark, Uber’s largest venture capital backer, will also drop a legal case it’s pursuing in arbitration against former co-founder and Chief Executive Officer Travis Kalanick.
SoftBank had been seeking a stake of at least 14 percent in the deal. The Wall Street Journal reported at least 20 percent of Uber’s shares had been tendered.
Dara Khosrowshahi has been a champion of SoftBank’s proposal since taking over as chief executive officer in September. In addition to the governance reforms, he’s looking to appease early employees and investors who don’t want to hold onto their shares until 2019, when Uber is expected to conduct an initial public offering.
This year, Uber faced a politically motivated boycott, employee claims of sexism, a high-profile lawsuit over trade-secrets theft, a video published by Bloomberg showing Kalanick berating an Uber driver and questions about his business tactics. The unwanted attention has brought intense government scrutiny. The U. S. Justice Department was exploring at least five criminal probes in recent months, and London moved to ban the service.
For SoftBank, the deal will make founder Masayoshi Son an influential investor across the ride-hailing sector. He will hold stakes in five of the world’s biggest startups, including themarket leaders in China, India, Southeast Asia, Brazil and the U. S. SoftBank earlier this month took part in Didi Chuxing’s fundraising, adding to an earlier $5.5 billion investment in the company.