Uber to Sell a Large Chunk of Stake to Softbank

NATION-NOW     Uber nears deal for huge Soft Bank investment     
       Uber nears deal for huge Soft Bank investment

Softbank will buy Uber shares using a process known as a tender offer that completes in a month.

The deal could still fall through if there aren't enough interested sellers.

Uber, in a statement to Reuters on Tuesday, confirmed Kohli had quit. "We believe this agreement is a strong vote of confidence in Uber's long-term potential".

"Upon closing, it will help fuel our investments in technology and our continued expansion at home and overseas, while strengthening our corporate governance", it added.

SoftBank - along with Dragoneer Investment Group, General Atlantic and Chinese ride-sharing giant Didi Chuxing - will directly invest US$1 billion into Uber.

Currently Uber's largest shareholder is U.S. venture capital firm Benchmark with a 13 percent stake and founder Travis Kalanick who has a 10 percent stake. The agreement struck on Sunday removed the final obstacle to allowing SoftBank to proceed with an offer to buy to stock.

Uber said this week that a planned deal with SoftBank and Dragoneer Investment Group was moving forward. The firm will also suspend the lawsuit that it filed against Mr. Kalanick, and drop the suit upon completion of the tender offer. If the new deal is closed, the SoftBank-led consortium will own about 14 percent stake in the ride-sharing pioneer, now valued at around US$68 billion.

These shares are expected to be purchased at a lower valuation, yet to be determined.


An Uber spokesman declined to comment on Sunday.

The pact gets Uber closer to clearing a major hurdle as it tries to overcome a series of scandals, leadership turmoil and executive departures.

The money would help Uber to expand and invest in technology. In this process, a price will be decided for existing Uber shares.

Uber's Chief Executive Officer (CEO) Dara Khosrowshahi said Thursday that the the San Francisco-based ride-hailing company will go public in 2019. The deal is also tied to new governance rules that aim to distribute power more equally and bring more oversight to the company.

If the deal materialises, SoftBank would be an investor in two of India's largest on-demand cab service - Uber and Ola.

The deal with SoftBank is aimed at getting past the clashes between Kalanick and early investors like Benchmark Capital, which has sued the former CEO.

Softbank has yet made no comments on the deal. A board majority would have to approve any appointments by Kalanick, who controls three seats. In addition to his own seat, Kalanick controls two more, which are occupied by Ursula Brown, the former Xerox Corp CEO, and former Merrill Lynch & Co Inc CEO John Thain.

SoftBank may not invest if conditions on share price and a minimum of shares are not satisfactory for the SoftBank Group side.

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