Published: Fri, December 29, 2017
Markets | By Josh Butler

Softbank reaches deal to get big discount on Uber shares

Softbank reaches deal to get big discount on Uber shares

Uber said in September it was shutting down the auto-leasing business, which had run up huge losses. With this tender offer, Khosrowshahi was able convince some of the company's early powerbrokers, including venture capital firm Benchmark Capital, to whittle down their stakes in the company to bring on what he believes will be a stabilizing force in SoftBank.

The investment is seen as a sign of support from the influential investors for its chief executive, Dara Khosrowshahi, who took the job in August and has helped negotiate the deal.

The investment is poised to trigger several major organizational changes at Uber that were contingent on securing SoftBank's funding.

The investor group is also buying about $1.25bn worth of new shares at a price that values the firm at nearly $70bn, a significantly higher price that is similar to what Uber shares fetched in its last fundraising round. Earlier reports have indicated that Dragoneer Investment Group and existing Uber backer General Atlantic may be among the interested parties.

Softbank will invest $1 billion into Uber in hopes of ridding investor concerns the tender offer lowers the value of remaining shares, the Wall Street Journal reported.

SoftBank buys large stake in Uber: WSJ
SoftBank Succeeds in Tender Offer for Large Stake in Uber

As part of the deal, SoftBank is expected to buy shares from employees and investors worth about 15% of the company and will invest an additional $1.25 billion directly into Uber.

The blockbuster deal offers a cash infusion to Uber and its shareholders ahead of its actual public offering, which is planned for 2019.

"We look forward to working with the purchasers to close the overall transaction", the Uber spokesperson said.

As part of the deal, Uber plans to add six directors, two of whom come from SoftBank, and expand voting rights for all investors. However some Uber investors were concerned the price SoftBank was offering was too low, according to Recode.

The investment comes after a year of troubles for Uber, including a lawsuit by Alphabet Inc's self-driving auto unit Waymo, that alleges trade secrets theft, and federal investigations that include possible bribery of foreign officials in Asian countries and the use of software to evade regulators.

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