SoftBank buys Uber shares at 30pc discount as investors cash out

Dec 29, 2017, 00:37
SoftBank buys Uber shares at 30pc discount as investors cash out

Employees and investors allegedly tendered shares representing 20% of the company. SoftBank has access to all kinds of technology that could be relevant to Uber's self-driving auto plans via its other investments, and with its help, Uber will be better positioned to expand into Asia.

Uber said: "We look forward to working with the purchasers to close the overall transaction, which we expect to support our technology investments, fuel our growth and strengthen our corporate governance". 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.

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Softbank will invest $1 billion into Uber in hopes of ridding investor concerns the tender offer lowers the value of remaining shares, the Wall Street Journal reported.

But the discount is a humbling coda on a rough year for Uber, which has been rocked by a series of scandals, from claims of sexual harassment to revelations of a program meant to deceive law enforcement.

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Uber's board of directors, which had devolved into a power struggle between Uber's former CEO, Travis Kalanick, and its largest investor, Benchmark, will now likely be calmer. It also continues to experience steep losses.

The investor group is also buying about $1.25bn worth of new shares at a price that values the firm at nearly $70bn, a significantly higher price that is similar to what Uber shares fetched in its last fundraising round. Nothing malicious has happened partly because Uber paid the hackers $100,000 to destroy the stolen information, CBS News confirmed last month. The tender offer period concluded on Thursday. Earlier reports have indicated that Dragoneer Investment Group and existing Uber backer General Atlantic may be among the interested parties.

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Still, the price is at a 30 percent discount to the most recent valuation of $68 billion.

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