SoftBank: No final agreement on Uber

Andrew Cummings
November 14, 2017

Uber had said funds from SoftBank, subject to the closure of the deal, would help the US-based startup fuel investments in technology and expansion in its home market as well as other countries.

SoftBank shares were down 0.75 percent on the news with Makoto Sengoku, market analyst at Tokai Tokyo Research Centre, saying that investors were underwhelmed with the news.

Uber technologies are now facing a legal battle related to investments and shares between their previous CEO Travis Kalanick and the current shareholder.

Uber is now valued at around $68.5bn (£52.4bn), but reports suggest that the stock offers would be based on a lower valuation, making the total value of the multibillion-dollar deal unclear. SoftBank plans to buy about $1 billion of fresh stock at Uber's current valuation of about $68.5 billion, but the bulk of the deal will be purchasing existing Uber shares from current investors. The deal also includes Uber governance changes.

The Uber board agreed more than a month ago to bring in SoftBank as an investor and board member, but fighting between Benchmark and Kalanick slowed talks. Softbank chief executive Masayoshi Son though said, "Whether we make an investment in Uber, or not, is not decided yet".

SoftBank also owns pieces of ride-hailing companies around the world, including Didi Chuxing in China, Ola in India, Grab in Southeast Asia and 99 in Brazil. During the negotiations, former CEO and co-founder Travis Kalanick also put in a condition that Benchmark put the lawsuit against him on hold, something that the investor eventually gave in to.

But the Japanese firm voiced caution, saying: "While the SoftBank Group side is considering an investment in Uber, there is no final agreement at this stage". He still has a seat on the company's board.

Since that meeting, SoftBank, Uber and Uber's early investors have haggled over deal terms. Is Uber still worth $68bn?

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