Largest Uber Investors To Cash Out On SoftBank's Tender Bid

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Two of Uber's largest investors agreed to partially cash out on SoftBank's record-high investment into the company that's expected to become the largest private stock sale in the history of trading, Recode reported earlier this week, citing a spokesperson for the Japanese tech giant. The stakeholders that will be selling some of their shares to SoftBank are Benchmark Capital and Menlo Ventures, with the two being the main initiators of the movement that saw co-founder Travis Kalanick ousted from his position of Uber Chief Executive Officer earlier this year. Benchmark later even sued Mr. Kalanick for fraud over a number of board seats he added to the ride-hailing startup in 2016 as part of a move that the 41-year-old billionaire described as a smear campaign. The lawsuit proved to be a major roadblock to the deal sought by SoftBank, with Uber's suitor insisting the matter be dropped or suspended less it walks away from the proposed transaction worth approximately $10 billion that would also see around $1 billion injected directly into the world's most valuable startup and grant it a stake of between 14 and 17 percent, according to previous reports.

The SoftBank-led consortium seeking to invest in Uber is set to purchase the majority of the company's stock on the secondary market at a 30 percent discount on its $68.5 billion valuation, prompting some existing stakeholders to refuse cooperation out of fear such a transaction would significantly devalue the firm, even if the aforementioned financial injection would be based on a full valuation. The heavily discounted price is still deemed too high by some of SoftBank's partners, with one of them being New York-based growth equity company General Atlantic that already dropped out of the move, according to one insider.

With both SoftBank and Benchmark insisting on Mr. Kalanick's corporate powers being significantly reduced for the investment to be completed, it appears the co-founder agreed to such terms. Benchmark itself recently said it expects Uber to surpass a $100 billion valuation in the near future, yet SoftBank claims any shares purchased as part of its tender offer would be subject to the same terms which put the value of the San Francisco-based firm at less than half of that figure. Stakeholders with over 10,000 shares now have 20 days to decide whether they want to cash out on the offer, with the investment already being nominally agreed by Uber and SoftBank.

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