Significant Uber Stake Might Be Bought at 30 Percent Discount by SoftBank-Led Consortium

Japanese conglomerate, SoftBank, has reportedly made an offer to buy one-sixth of the ride-service company, Uber. According to sources familiar with the matter, the offer per share would be $32.96, which adds to a total of approximately $50 billion.

It was previously reported that Uber agreed to an investment from a consortium led by SoftBank and private investor, Dragoneer. Now, investors from both organizations are offering to spend more than $6 billion for a stake that would value Uber about 30 percent lower than its last private valuation of $70 billion.

SoftBank’s owner, Masayoshi Son, raised the largest technology investment fund last year totaling at $93 billion. He has investments in numerous tech branches including robotics, e-commerce, semiconductors, and satellites.

The investment is a breath of fresh air, in part due to Uber’s turbulent year, involving a concealed hack and a CEO that was forced to resign.

“SoftBank’s expectation that it can get shareholders to part with their shares at about %50 billion builds in all the negative news,” states Kirk Boodry, an analyst at New Street Research.

Boodry notes that the controversies surrounding Uber have lowered its overall value. Uber’s new CEO, Dara Khosrowshaki, believes the new investment is a breath of fresh air and considers the Japanese conglomerate to be a powerful backer.

If the acquisition is successful, the SoftBank-Dragoneer consortium will buy around 14 percent of the shares from existing Uber investors. Along with the purchase, there will be another $1 billion direct investment into the ride-hailing company which would render the coalition one of Uber’s biggest shareholders. The Softbank-led group would get two board seats in addition.

Uber employees with shares that value at least $10 thousand will be eligible to sell along with other shareholders such as venture capitalists, angel investors, and former employees. The company did not allow shareholders to sell their stock in the past, however, the 1 billion investment will allow Uber to continue expanding. Khosrowshaki expects to take Uber public in 2019.

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