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ibusinesslines.com July 23, 2018


Uber to Sell a Large Chunk of Stake to Softbank

14 November 2017, 12:37 | Kelvin Horton

Uber to Sell a Large Chunk of Stake to Softbank

Uber to Sell a Large Chunk of Stake to Softbank

The statement came after Uber said it had entered an agreement with a consortium led by SoftBank and investment group Dragoneer on what it termed a "potential investment". But it could transform its corporate structure and see a share listing by 2019, if the deal goes ahead.

Rajeev Misra, CEO of SoftBank's $93 billion tech investment fund, warned that the company could walk away if Uber shareholders demand too much.

The agreement follows an October 3 Uber board meeting, in which directors voted to move forward with an investment from SoftBank. As part of the deal, Uber's board agreed to governance changes, including measures that reduce the influence that Mr Travis Kalanick, Uber's former chief executive, has at the firm.

The two parties reportedly reached an agreement on control of board seats, which included Benchmark putting its lawsuit on hold - while Kalanick will allow directors to vote on his future appointments to the three seats he oversees.

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SoftBank plans to buy the Uber shares along with other investors.

"SoftBank shows a remarkable amount of bravery, confidence and optimism to look to apply this much money in technology", said Bill Maris, who started Google Ventures almost a decade ago and runs his own California-based investment firm Section 32.

But the Japanese firm voiced caution, saying: "While the SoftBank Group side is considering an investment in Uber, there is no final agreement at this stage".

Uber does not necessarily need new money, as it has raised more than $10 billion in debt and equity and has some $5 billion in the bank. The deal could also be the largest private stock sale ever, and will create a host of new San Francisco millionaires as early employees sell shares. Uber left the China market in 2016 by selling its operation to Didi and taking a minority investment stake in the new company.

A deal would be positive for Uber, which is seeking to turn the page after recent repeated scandals, among them workplace sexual harassment allegations. Both companies have pumped in millions of dollars towards rider discounts and driver incentives.



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