SoftBank offers to buy Uber shares – but wants a 30% discount
SoftBank has reportedly told Uber it still wants to invest in the ride-sharing app, but wants to buy the shares at a discount rate.
“A person familiar with the manner” told Bloomberg that SoftBank executives have told Uber’s stakeholders they want the shares at a nearly 30% discount based on the company’s most recent valuation of $68 billion, possibly in response to the recent bad publicity surrounding the firm.
SoftBank is leading a consortium alongside San Francisco investment group Dragoneer that has agreed to buy at least 14% of Uber through the purchase of shares from employees and investors. Once the consortium has officially declared its offer, those affected will have 20 working days to agree to the terms. If it doesn’t reach the 14% threshold, it will likely increase its bid to encourage more people to sell up.
Earlier this month, a spokesperson for the scandal-hit ride-sharing company said, “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 abroad, while strengthening our corporate governance.”
It’s thought that while most of SoftBank’s investment will be used to buy out current shareholders, around $1bn will be used to buy new shares. Should the deal go ahead, SoftBank is expected to own a substantial part of the company in anticipation of Uber potentially becoming a public company in 2019.
The claims come just weeks after the deal looked in doubt. On November 6, SoftBank CEO Masayoshi Son said that SoftBank “had not yet decided on the investment” and that progress would depend on “the price and the terms”. If such an agreement could not be met, SoftBank was also considering investing in US Uber rival Lyft.
According to Recode.net, SoftBank’s $93bn Vision Fund is not only the largest tech fund ever but also “the largest corporate venture capital fund of all time”. The Japanese conglomerete has previously invested large sums in UK tech firm ARM Holdings and US telecoms company Sprint.
After the announcement, the BBC reported that SoftBank CEO Son “is known to have an eye for potentially transformative industries and trends.” As an early investor in Chinese e-commerce giant Alibaba, Son owns close to 30% of its shares.