SoftBank and its partners are primed to buy around 20% of Uber shares at a huge discount from its previous $69 billion valuation

GettyUber CEO Dara Khosrowshahi.
  • Employees and shareholders have offered to sell at least 20% of Uber to SoftBank.
  • SoftBank will buy the shares at a 30% discount.
  • Assuming the deal goes through, SoftBank has agreed to buy another $US1 billion worth of Uber shares at the company’s previous $US69 billion valuation.

A group of investors led by SoftBank looks set to acquire a 20% stake in Uber at a whopping 30% discount, the Wall Street Journal reported.

SoftBank and its partners offered to buy shares from Uber employees and existing investors at $US33 a share, according to Recode. That would value the app-based taxi company at $US48 billion, or about 30% less than the $US69 billion valuation it had after its last funding round.

An Uber spokesman confirmed the $US48 billion valuation in an emailed statement. If the deal is successful, SoftBank will buy another $US1 billion worth of Uber shares at the company’s prior $US69 billion valuation, the spokesman said.

Following SoftBank’s tender offer, Uber employees and investors offered to sell shares equivalent to about a fifth of the company to the investment firm at its proposed discounted price, according to the Journal. 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.

The deal is somewhat in flux. Employees could choose not to sell before SoftBank’s offer expires at noon Pacific Time on Thursday.

With Uber’s initial public offering not expected to come before 2019 and the company having just experienced a rocky 2017 with massive ongoing losses, many early Uber investors have appeared eager to cash in some of their shares in what has become the world’s most valuable privately held tech startup. However some Uber investors were concerned the price SoftBank was offering was too low, according to Recode.

The Uber deal would mark the latest massive investment by SoftBank’s$US93 billion Vision Fund.

SoftBank’s investment will spur Uber to overhaul its corporate governance, according to previous reports. How the company is run became a hot-button issue this year, which saw a seemingly never ending string of crises at the company and the resignation of cofounder and CEO Travis Kalanick. It’s not immediately clear when those reforms will be put in place.

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