Uber Sells Stake to SoftBank, Valuing Ride-Hailing Giant at $48 Billion

Posted December 29, 2017

SoftBank's tender offer for Uber resulted in a resounding success and has convinced stakeholders to offer to sell as much as 20 percent of the ride-hailing service provider, The Wall Street Journal reported Thursday, citing people with knowledge of the development. Last month, Uber disclosed that it had covered up a security breach that had compromised the personal data of 57 million rider and driver accounts, and SoftBank was able to talk down the price of its investment. 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.

The shake-up was supported by Uber's new chief executive Dara Khosrowshahi, who has said he hopes to list Uber's shares publicly in 2019. The companies said they would issue a statement on the outcome of the tender offer. The sellers of Uber shares haven't been disclosed, but some Uber employees are rumored to be among those selling, along with investors Benchmark and Menlo Ventures.

Still, the price is at a 30 percent discount to the most recent valuation of $68 billion.

As part of the agreement, SoftBank will obtain two seats on Uber's expanded 17-person board, which still includes former CEO Travis Kalanick.

According to the Wall Street Journal, a Japanese investor group is now buying up a large stake of Uber - and getting it at a sharp discount, too.

The deal will also benefit Uber's employees, drivers and riders, said Chris Sacca, founder and head of Lowercase Capital, a major Uber shareholder that did not sell shares in SoftBank's tender offer.

Once approved, the transaction will value the company at $48 billion. SoftBank will appoint Vision Fund head Rajeev Misra to the board, along with others associated with the massive fund, according to the report.