Uber Technologies Inc. shareholders have agreed to sell a sizable stake in the ride-hailing leader to an investor group led by SoftBank Group Corp allowing the Japanese conglomerate to amass a piece of the company at a steep discount to the last valuation.
The investor group, which includes SoftBank, Dragoneer Investment Group, TPG, Tencent Holdings, and Sequoia Capital also will put $1.25 billion directly into the San Francisco-based business, the deal values the ride-services firm at $48 billion price which is roughly 30 percent discount to Uber’s most recent valuation of $68 billion.
“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.
Existing backers with more than 20 percent of Uber shares tendered their stakes, and about $9 billion is being invested in the overall deal. The SoftBank-led group will end up owning roughly 17.5 percent of the startup, with SoftBank at 15 percent holding the largest stake.
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.
The transaction will also put in motion a slate of governance reform at Uber that were dependent on the deal going through, thiswill expand the board to 17 and revoke outsize voting power given to early backers. Bechmark, 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.
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. It would also give the business some additional capital to beat back rivals, which have gained steam after a succession of setbacks for Uber.
SoftBank,is a Japanese multinational telecommunications corporation established on September 3, 1981, and headquartered in Tokyo,Japan. It has operations in broadband; fixed-line telecommunications; e-commerce; Internet; technology services; finance; media and marketing; semiconductor design; and other businesses.
SoftBank was ranked in the Forbes Global 2000 list as the 62nd largest public company in the world, and the third largest public company in Japan after Toyota and Mitsubishi. Led by Japanese billionaire Masayoshi Son, raised $93 billion this year, the largest technology investment fund ever.
He’s stepping up investments beyond his traditional wireless business with deals in e-commerce, robotics, semiconductors and satellites. SoftBank already holds stakes in China’s Didi Chuxing, India’s Ola and Southeast Asia’s Grab, three of the world’s largest ride-hailing companies after Uber.
Uber Technologies Inc. is a global taxi technology company headquartered in San Francisco, California, United States, operating in 633 cities worldwide. It develops, markets and operates the Uber car transportation and food delivery mobile apps.
The firm had an abysmal year, with its co-founder and former CEO resigning under pressure and the company admitting it concealed a hack that exposed personal data of 57 million customers and drivers. Also employee claims of sexism, a high-profile lawsuit over trade-secrets theft, a video published by Bloomberg showing his former CEO Travis Kalanick berating an Uber driver and questions about his business tactics.
