In something of a twist on the usual Cyber Monday sale prices, an investor group led by Japan’s SoftBank has reportedly offered to buy a 13% stake in Uber at a 30% discount to the ride-hailing firm’s most recent valuation.
SoftBank has offered stakeholders in the world’s biggest unicorn an investment of $6 billion at a valuation $48 billion. The Japanese firm recently invested $1 billion in the company at a valuation of $69 billion.
But Uber has had a difficult, if not downright terrible, year. The company’s co-founder and CEO, Travis Kalanick, resigned under pressure following a nasty public spat, and just last week Uber admitted concealing a hack that exposed the personal information of some 57 million customers and drivers.
Uber’s early stakeholders are faced with a choice. Either hold on and hope that new CEO Dara Khosrowshahi can straighten the company out or cash out now at a nice premium but one that is less than it might be in 2019, which Uber has targeted for its initial public offering.
SoftBank raised an investment fund of $93 billion this year, the largest technology investment fund ever. In addition to its majority ownership of Sprint, Softbank has also invested in Chinese ride-hailing firm Didi Chuxing, as well as India’s Ola and Southeast Asia’s Grab, other top ride-hailing companies.
Khosrowshahi has been working on this deal for some time. Nabbing a significant investment from SoftBank at a reasonable valuation could go a long way to repairing the damage done over the past year. A deal gives Uber a deep-pocketed investor that might be willing — and is certainly able — to take some of the other players off the board.
A tender offer from Softbank is expected to begin as soon as today (Tuesday). According to a report at Bloomberg News, a “number” of Uber stakeholders have agreed to sell, but there is still some work to do to corral enough of them. The tender offer may last as long as 20 days, according to Bloomberg sources.
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