SoftBank Succeeds in Tender Offer for Large Stake in Uber

Sean Reid
December 29, 2017

Uber Technologies Inc. shareholders are said to 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.

SoftBank and the rest of consortium, which includes Dragoneer Investment Group, will own approximately 17.5 percent of Uber, a person familiar with the matter said.

Uber reached a multi-billion dollar deal with SoftBank on Thursday, as the ridehailing firm prepares to go public. And in a maneuver to prop up Uber's value, SoftBank will also purchase up to $1.25 billion worth of new shares at the existing valuation of $67.5 billion. As CNNMoney has previously reported, this latter investment was contingent on SoftBank getting enough Uber insiders to sell for it to gain a stake of at least 14%. SoftBank will occupy two seats on the company's board and will now be an extremely influential player in decisions at Uber.

While SoftBank played hardball with Uber, it promised investors it would cover the price difference for them if the final sale price came in over $33 a share, according to a clause in the documents detailing the terms of the agreement. The company is also planning an initial public offering in 2019.

"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", Uber said in a statement.

FILE PHOTO: A fleet of Uber's Ford Fusion self driving cars are shown in Pittsburgh, Pennsylvania, U.S. September 13, 2016.

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FILE PHOTO - The Uber logo is seen on a screen in Singapore August 4, 2017.

Uber and SoftBank announced a deal Thursday allowing the Japanese tech titan to take a large stake in the United States ridesharing giant, making a hefty cut in the valuation of the biggest venture-backed startup.

The Wall Street Journal first reported on Thursday that the tender deal would be successful, citing unnamed sources. Misra said SoftBank had "tremendous confidence in Uber's leadership and employees".

SoftBank has previously pumped billions into several ride-hailing companies overseas, including Didi in China, Grab in Southeast Asia and 99 in Brazil.

Over the past year, a former employee's charges of endemic sexual harassment led to an internal review, the mayor of London said he would strip Uber of its licence and Uber revealed it had covered up a major hack.

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