Softbank reaches deal to get big discount on Uber shares

SoftBank Corporation

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. Uber is losing more than $1 billion each quarter, and a new cash infusion is critical.

By itself, SoftBank will likely only acquire enough shares to gain a 15% stake in the company; its partners will likely purchase the remaining 5% stake on offer, the Journal reported.

A consortium led by SoftBank Group Corp has successfully bought a large number of shares in Uber in a deal that values the ride-hailing/food delivery firm at $48bn (£36bn), Uber said on Thursday. SoftBank will occupy two seats on the company's board and will now be an extremely influential player in decisions at Uber.

A separate statement from Rajeev Misra, chief executive of SoftBank Investment Advisers, said, "We are appreciative of the support from Uber's shareholders in the successful tender offer and look forward to closing the overall investment in January". The company is also planning an initial public offering in 2019.

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When the deal is completed, the company will make governance changes, expanding Uber's board from 11 to 17 members including four independent directors, limiting some early shareholders' voting power and cutting the control wielded by Kalanick, who remains on the board and is still one of the largest stakeholders.

"The stockholders did the smart thing".

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Uber investors and employees tendered shares worth about 20 percent of the company, sources told The Wall Street Journal.

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Uber and SoftBank announced a deal Thursday allowing the Japanese tech titan to take a large stake in the U.S. ridesharing giant, making a hefty cut in the valuation of the biggest venture-backed startup. We have tremendous confidence in Uber's leadership and employees and are excited to support Uber as it continues to reinvent how people and goods are transported around the world.

SoftBank first publicly expressed interest about investing in Uber over the summer, while the startup was still looking for Kalanick's replacement. Didi last week raised $4 billion, including some investment from SoftBank.

SoftBank's investment will spur Uber to overhaul its corporate governance, according to previous reports.

Over the past year, a former employee's charges of endemic sexual harassment led to an internal review, the mayor of London said he would strip Uber of its licence and Uber revealed it had covered up a major hack.

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