Published: Fri, December 29, 2017
Finance | By Kristine Clayton

Uber's valuation could be significantly slashed after SoftBank deal

Uber's valuation could be significantly slashed after SoftBank deal

The news outlet says ride-share pioneer Uber has agreed to sell roughly 20% of itself to a technology investment fund run by Softbank Group in a complex deal that values all of Uber at $48 billion, or around 30% less than its most recent valuation of $70 billion.

The SoftBank deal triggers new governance terms at Uber that were approved by the company's board in October, though.

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.

The moves come as Uber concludes a hard year, in which it faced a sexual harassment scandal, investigations by regulators and a lawsuit over allegedly stolen technology, among other challenges. The companies said they would issue a statement on the outcome of the tender offer. SoftBank is said to be limiting its purchase to 15pc, with other investors to buy the additional shares.

Mr. Khosrowshahi also said he wanted to take Uber public by 2019, and investors wondered if the company could maintain its valuation as it prepared for an initial offering of shares.

SoftBank and its co-investors have successfully acquired at least 13 percent of Uber, a major victory for Uber's new CEO and one that will give billions of dollars in cash to some of the company's earliest investors and employees.

The change is expected to reduce the influence of former chief executive Travis Kalanick, who was ousted from the top role in June but remains a board member.

The Journal further reports that SoftBank will receive two seats on Uber's board of directors. Its Softbank Vision Fund is a almost $100 billion investment fund snapping up stakes in emerging technology companies around the world, with roughly half the money targeted for investments in the U.S.

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