Uber sells stake to Softbank for 30% discount
- Author: Wendy Palmer Dec 29, 2017,
Dec 29, 2017, 0:41
In a process known as a tender offer, which allows outsiders to buy shares in a private company at a mutually agreed upon price, some Uber employees, executives and early investors sold off what amounted to a little more than a 17% stake in the company to a consortium of investors led by SoftBank, according to a source familiar with the transaction.
Uber said the investment would fuel its expansion and technology investments. And in a maneuver to prop up Uber's value, SoftBank will also purchase up to $1.25 billion worth of new shares at the existing valuation of $67.5 billion. It marks the first significant piece of business for new CEO Dara Khosrowshahi, who is now preparing the embattled ride-hailing company to go public by 2019. The companies said they would issue a statement on the outcome of the tender offer. That's a roughly 30 percent discount over Uber's most recent valuation of close to $70 billion.
SoftBank has bought a major stake in Uber at a steep 30pc discount, after a chaotic year in which the ride-hailing firm faced a string of scandals, saw its chief executive resign and was hit with United Kingdom city bans.
SoftBank will likely limit the stake it acquires to 15% in the tender offer, which values Uber at $48 billion, the people said.
Travis Kalanick resigned in June as Uber's chief executive but stayed on the company's board of directors. While we have yet to learn which investors have cashed out for the price of about $33 a share, Thursday's result is the reward for years of drama at a company that nevertheless saw astronomical growth since its founding in 2009.
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.