Uber Sells Stake to SoftBank, Valuing Ride-Hailing Giant at $48 Billion

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Uber and Softbank have reportedly cut a deal that allows the Japanese fund acquire 15 percent of the ride-hailing giant at a deep discount.

SoftBank's tender offer for Uber resulted in a resounding success and has convinced stakeholders to offer to sell as much as 20 percent of the ride-hailing service provider, The Wall Street Journal reported Thursday, citing people with knowledge of the development.

The deal nevertheless sharply discounts Uber's value, which past year was estimated at nearly $70 billion. The deal will trigger a number of changes in the way the board oversees the company, which is facing with federal criminal investigations, a high-stakes lawsuit and complaints about its workplace culture.

SoftBank founder Masayoshi Son has taken a keen interest in ride-hailing companies around the world
SoftBank founder Masayoshi Son has taken a keen interest in ride-hailing companies around the world

Khosrowshahi, who took the top job in August after Travis Kalanick was forced to step down in June, helped negotiate the deal. Earlier reports have indicated that Dragoneer Investment Group and existing Uber backer General Atlantic may be among the interested parties.

The group will buy most of the shares from early investors in a deal that values Uber at about $48bn (£35.7bn).

Erik Gordon, an entrepreneurship expert at the University of Michigan's Ross School of Business, told Reuters the stockholders did the smart thing.

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"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", said in Uber spokesperson in a statement.

The blockbuster deal offers a cash infusion to Uber and its shareholders ahead of its actual public offering, which is planned for 2019.

Uber Technologies Inc said in September it was shutting down the auto-leasing business, which had heavy losses. However some Uber investors were concerned the price SoftBank was offering was too low, according to Recode. One will likely go to Rajeev Misra, chief executive of SoftBank's tech investment fund; no word yet on who will fill the second seat.

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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.

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