SoftBank May Drop Uber Deal If Its Stake Isn’t High Enough

November 14, 2017 - Written By Dominik Bosnjak

SoftBank may drop its proposed investment in Uber if such a move doesn’t guarantee it a large enough stake in the world’s most valuable startup, CNBC reported on Monday, citing Softbank Investment Advisors Chief Executive Officer Rajeev Misra. While Uber proclaimed the deal to be essentially done earlier this week, Mr. Misra promptly downplayed the current state of affairs, saying that the two are yet to agree to a tender price and that the transaction itself depends on how big of a share of the entity will SoftBank be able to seize. While the executive didn’t elaborate on the matter, some industry insiders claim that the Japanese conglomerate is aiming to purchase a 14 percent stake in Uber at a minimum and will otherwise walk away from what could become the largest stock purchase in history.

Apart from the fact that many investors still aren’t willing to sell, SoftBank is also yet to find some common ground with shareholders on the matter of the actual price of Uber’s private shares; the company is reportedly seeking a significant discount on Uber’s $69 billion valuation and is proposing to purchase the majority of its stock at a valuation closer to $50 billion, only pledging to inject some extra cash into the startup following the deal so as to not drive down its price with the investment. Many investors are said to be unwilling to accept those conditions despite the fact that Uber’s board formally voted to approve the move. SoftBank is still hoping to convince enough shareholders to sell, providing them with an unexpected opportunity to cash out their investments before an initial public offering that Uber is presently planning to hold in 2019.

Uber co-founder and ousted CEO Travis Kalanick has no intention to sell any of his shares but has reportedly agreed to have his powers to autonomously appoint board members to certain seats limited in order to facilitate the investment. Likewise, the fraud lawsuit launched against him by Uber investor Benchmark Capital was also suspended in order to pave the way for the deal to go through, according to recent reports. SoftBank’s decision to downplay the status of the proposed investment comes shortly after the company dropped out of the widely reported discussions to merge its subsidiary Sprint with T-Mobile, demonstrating that it’s willing to walk away from a multi-billion deal if it feels any such move would limit its desired influence over its assets.