Softbank in talks with Uber for $10 billion investment: report
15 September 2017
Japan's Softbank is discussing a massive $10 billion investment with ride-hailing company Uber, according to a report in the Wall Street Journal.
If Softbank makes full investments under the deal, it could get as much as 22 per cent stake in Uber, which would entail purchasing shares directly from the company as also existing shareholders looking to cash out, the report said.
The company was last valued at $69 billion, but as per the WSJ report, Softbank is trying to convince shareholders to agree to an auction process that would price Uber shares at a discount and value the company at $50 billion.
Meanwhile TechCrunch reported that Uber Technologies Inc would receive an $8 billion to $10 billion infusion from three investors, in what could become history's largest secondary transaction ever and allow the company's early investors a chance to net major gains.
According to TechCrunch Chinese rideshare behemoth Didi Chuxing, Japan's billionaire-backed SoftBank Group and San Francisco-based Dragoneer are close to finalising a deal with Uber. Under the terms of the deal, it would create both a direct investment in Uber as also a major buy-up of shares from early investors and employees.
"The round is significant, not only because of the deal size, but because the shares will likely be purchased at Uber's last private valuation of nearly $70 billion," TechCrunch reports.
"After months of public scrutiny and a formal investigation into the company's culture, which led to many executive departures, including CEO Travis Kalanick, there has been widespread speculation that Uber's valuation would be cut. Instead, this move doubles down on its existing value."
In 2016, Uber received a series of setbacks from a sexual harassment scandal, a string of federal investigations, a trade-secrets lawsuit by Google and the ouster of its founder and CEO Travis Kalanick, who was replaced by Expedia's top exec Dara Khosrowshahi last month.