Uber valued at $48bn after consortium secures shares deal

29 December, 2017, 01:50 | Author: Lora Ball
  • SoftBank becomes an investor in two of India's largest on-demand cab service- Uber and Ola

SoftBank's tender offer for Uber resulted in a resounding success and has convinced stakeholders to offer to sell as much as 20 percent of the ride-hailing service provider, The Wall Street Journal reported Thursday, citing people with knowledge of the development.

The price offered for the shares valued the firm at $48bn and was a discount to Uber's most recent fundraising round, but for some of the firm's earliest investors could provide a big payoff.

SoftBank's investment consortium also includes Dragoneer Investment Group and Tencent Holdings. He continued: "We have tremendous confidence in Uber's leadership and employees and are excited to support Uber as it continues to reinvent how people and goods are transported around the world".

Uber said in September it was shutting down the auto-leasing business, which had run up huge losses. But SoftBank CEO Masayoshi Son had repeatedly teased the possibility - some might say threat - of investing in Lyft instead, including as recently as last month.

More news: Plane headed to Key West for holiday crashes, killing 5

Earlier on Thursday, SoftBank made a so-called tender offer to Uber investors and shareholders, proposing to pay a reported $33 per share for their stock in the company. It marks the first significant piece of business for new CEO Dara Khosrowshahi, who is now preparing the embattled ride-hailing company to go public by 2019. Uber is losing more than US$1 billion each quarter, and a new cash infusion is critical.

Travis Kalanick resigned in June as Uber's chief executive but stayed on the company's board of directors. And the Uber deal will add to worries in Silicon Valley that the Japanese conglomerate can make similar demands on other investments. However, under the deal, Uber will take a stake in Fair and the startup will become an exclusive partner with Uber, offering drivers the ability to lease cars.

The investment comes after a year of troubles for Uber, including a lawsuit by Alphabet Inc's self-driving vehicle unit Waymo, that alleges trade secrets theft, and federal investigations that include possible bribery of foreign officials in Asian countries and the use of software to evade regulators.

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