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SoftBank Group Acquires Major Stake in Uber

SoftBank Group Acquires Major Stake in Uber 1z5e62

By Associated Press | Updated: 29 December 2017 10:26 IST

Highlights

SoftBank deal values Uber 30 percent lower than previous valuation
SoftBank gets a roughly 15 percent stake in Uber with the deal
Deal also curtails influence of former CEO Travis Kalanick

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A group led by Japanese technology conglomerate Dara Khosrowshahi as he seeks to move it past the firestorm that has consumed it for the past year. 30574o

In a tender offer that expired Thursday afternoon, SoftBank acquired a 15 percent stake in Uber while the remaining got about 3 percent, according to a person familiar with the situation who was not authorized to publicly discuss details. Under the deal, the SoftBank group will also buy about $1 billion (Rs. 6,400 crores) worth of new Uber stock. SoftBank said it expects to close the overall investment in January.

Uber has been plagued by a growing lawsuit accusing it of trade-secret theft. Uber denies engaging in trade-secret theft.

The SoftBank deal clears the way for Uber, among the most valuable tech firms in the world, to sell stock to the public. Under the deal, a possible initial public offering could take place before the end of 2019. Last month, Benchmark Capital, Menlo Ventures and other early Uber investors had confirmed their intent to sell shares in the company.

It also curtails the influence of former CEO Travis Kalanick, an Uber co-founder, who was pushed out in June but retained control of 3 of Uber's 11 board seats. Benchmark, in fact, sued the former CEO in August, accusing him of trying to pack the board with his allies and plotting to return as CEO.

As part of the SoftBank deal, Kalanick agreed to allow a majority of board to vote on any future appointments he makes. Benchmark agreed to suspend its lawsuit against Kalanick and to drop it after the end of the tender offer period.

"We have tremendous confidence in Uber's leadership and employees and are excited to Uber as it continues to reinvent how people and goods are transported around the world," SoftBank CEO Rajeev Misra said in a statement.

Uber said in a statement that the overall transaction would " our technology investments, fuel our growth, and strengthen our corporate governance."

Uber had been valued at $68.5 billion (roughly Rs. 4,38,000 crores) in a previous stock sale. The Wall Street Journal said the tender offer valued Uber at $48 billion (roughly Rs. 3,07,000 crores), a 30 percent discount.

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