SoftBank Acquires 15% Stake in Uber

SoftBank, the technology conglomerate based in Japan, led a group that has acquired a 15% stake in ride-hailing company Uber that could tamp down the internal warfare at the problematic company and strengthens the position of CEO Dara Khosrowshahi as he looks to move the company past the problems that has hurt it the last year.

In a tender offer with an expiration of Thursday afternoon, a stake of 15% was acquired by SoftBank in Uber while the other members received 3%, according to a source who is close to the situation.

Under this deal, SoftBank will buy approximately $1 billion in new stock issued by Uber. The overall investment is expected to be closed by SoftBank during January.

Uber has had huge problems with a series of different scandals the last year, including sexual misconduct allegations and charges it sent an espionage team in an attempt to steal trade secrets from rivals.

It is also battling with London regulators over the right to continue operating there, dealing with fallout from a huge hack to passenger and driver data it paid handsomely to conceal, and battling Waymo, the Google spinoff, in court which has accused it of stealing trade secrets. Uber has denied taking part in the theft of trade secrets.

The deal with SoftBank opens the door for Uber, amongst the highest valued tech companies worldwide, to sell its stock to the public.

Under this deal, an initial public offering can take place prior to the end of 2019. In November, Menlo Ventures, Benchmark Capital, as well as other early investors in Uber confirmed intent to sell shares.

The deal also cuts the influence of co-founder and former CEO Travis Kalanick, who was forced out during June but kept control of 2 of the 11 Uber board seats.

In fact, Benchmark sued the former top Uber executive in August leveling accusation that Kalanick wanted to fill the board with his own allies and was plotting his return to the CEO spot.

Part of the deal with SoftBank is that Kalanick agrees to allow a majority of members of the board to vote on future appointments the former CEO makes. Benchmark made an agreement to suspend its suit against Kalanick and drop it following the tender offer period’s expiration.

Uber has been given a value of $68.5 billion during a previous sale of stock. The tender offer placed a value of $48 billion on Uber, equal to a 30% discount.

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