SoftBank Group Corp., along with a group of investors, have reportedly made a surprising bid for shares of Uber Technologies Inc. SoftBank wants to acquire at least a 14 percent stake in the ride-hailing company. Uber is one of the world’s most valuable companies, with its most recent valuation at $68.5 billion.
The SoftBank-led coalition would buy at least 14 percent of the shares from existing Uber investors and make an additional $1 billion direct investment in the company. The investment would give the Japanese investor up to 17 percent of the ride services company.
SoftBank saw an opportunity to buy shares at a discount. Uber has been plagued with scandals for most of 2017. The company’s co-founder and former CEO Travis Kalanick recently resigned under pressure from investors and the company has repeatedly put off an initial public offering. New Uber Chief Executive Officer Dara Khosrowshahi has said he expects to take Uber public by 2019.
SoftBank and partners are offering a price that is about 30 percent lower than the valuation it fetched in its most recent round of fundraising. If the stock sale is completed, the SoftBank coalition will receive two board seats, according to sources with knowledge of the matter. The acquisition would be one of the largest ever purchases of stock in a private company and would make the group one of Uber’s biggest shareholders.
The deal has reportedly already been approved by the Uber board. A number of Uber shareholders have reportedly already agreed to sell shares, but it is unknown whether they will still sell at the lower valuation. The share offer gives existing shareholders a way to sell equity and the price would represent a significant windfall for many early investors. The tender offer is expected to start Tuesday and could last as many as 20 business days.
The deal has not yet been finalized. If too few shareholders agree to sell their shares, Softbank has the option to either raise its bid or walk away from the deal. The company has already signaled that it would be willing to walk away if the terms were deemed less than sufficient. Now the ball is in the Uber shareholders’ court.