Uber Technologies Inc. approved SoftBank Group Corp.’s offer to buy a multibillion-dollar stake in the ride-hailing company, setting the stage for one of the largest private startup deals ever.
The agreement lets SoftBank and other firms invest up to $1 billion in Uber and proceed with a tender offer in coming weeks to buy up to $9 billion in shares from existing investors. The deal could still fall through if there aren’t enough interested sellers. The deal also includes Uber governance changes.
“We’ve entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment,” Uber said in a statement.
As part of the deal, venture capital firm Benchmark agreed to put its lawsuit against Uber co-founder Travis Kalanick on hold and drop the complaint when SoftBank’s investment and the governance reforms kick in, the people said. Kalanick is agreeing to give Uber’s board majority approval over the board seats he controls should he ever need to fill them again.
SoftBank, along with Dragoneer Investment Group and General Atlantic, are expected to invest at least $1 billion in Uber and purchase up to $9 billion worth of Uber shares from existing investors. The initial price for the tender offer may not be set for more than a week, a person familiar with the matter said. SoftBank is expected to buy shares from Uber at the company’s current valuation of nearly $70 billion, but the price of the secondary stock sale — in which existing investors sell — is expected to be lower.
Investors TPG, Tiger Global, DST Global and the Chinese company Tencent Holdings Ltd. may also buy Uber shares as part of the deal