SoftBank acquires a 20 percent stake in Uber

Randal Sanchez
December 29, 2017

As part of the agreement, SoftBank will obtain two seats on Uber's expanded 17-person board, which still includes former CEO Travis Kalanick. SoftBank, which is heavily invested in other ride-hailing companies around the globe, could help Uber strike more partnership deals, especially in Asia.

The tender offer valued Uber at about 30% less than the $69 billion it was pegged at in June 2016, after the company sold a chunk of shares to Saudi Arabia's Public Investment Fund for $3.5 billion. The companies said they would issue a statement on the outcome of the tender offer.

The moves come as Uber concludes a hard year, in which it faced a sexual harassment scandal, investigations by regulators and a lawsuit over allegedly stolen technology, among other challenges. SoftBank and its co-investors are acquiring some of the company at a valuation of $48 billion.

The SoftBank deal triggers new governance terms at Uber that were approved by the company's board in October, though.

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Uber's legal tangles include a lawsuit by Alphabet Inc.'s self-driving vehicle unit Waymo that alleges trade-secrets theft and federal investigations that span possible bribery of foreign officials in Asian countries and the use of software to evade regulators.

Rajeev Misra, chief executive of SoftBank's Vision Fund, a tech investment vehicle, will be nominated to the Uber board, the Journal reported.

Strategically, the move makes all kinds of sense for Uber.

SoftBank is scooping up a large chunk of Uber's shares after it opened a tender offer, reports the Wall Street Journal. Softbank will limit its stake to 15 percent, valuing Uber at a 30 percent discount of its most recent valuation of almost $70 billion. "It locks in new rules to ensure that Uber's old leadership regime can't come back to power", Mr. Sacca said.

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