SoftBank Group has offered to buy shares of Uber at a 30 percent discount on the ride-hailing service company’s current valuation of $68.5 billion, meaning that the Japanese telecommunications giant wants to purchase Uber shares at a valuation of $48 billion, according to a report by Reuters. The investment consortium led by SoftBank and Dragoneer Investment Group reportedly seeks to acquire at least 14 percent of Uber shares, with the tender offer being expected to be formally out today.
The offer comes a few weeks after Uber’s board of directors finally approved the investment offered by SoftBank, which could be worth around $10 billion consisting of up to $1.25 billion in cash and a purchase of between 14 to 17 percent of existing stock from Uber investors and employees. The investment is expected to result in a major overhaul of Uber’s leadership structure that would put limitations on the voting capacity of some shareholders, increase the number of board members from 11 to 17, and completely seriously nullify the power of former Chief Executive Officer Travis Kalanick. Earlier this month, SoftBank reportedly threatened to withdraw its investment offer for Uber if the transportation company failed to settle a dispute over the corporate powers of Kalanick as the Japanese conglomerate has been seeking to limit the influence of the former executive at the company from which he was ousted several months back following a long string of scandals.
On top of the share purchase at the discounted valuation, SoftBank is also likely to approve an additional investment of $1 billion at a full, $68.5 billion valuation. Still as part of the SoftBank-led consortium’s investment in Uber, the group is set to hold two new seats on the firm's board of directors. Uber’s board voted to finalize SoftBank’s proposed investment in October and the deal is expected to be the biggest sale of any private stock in the history of trading, with the San Francisco, California-based company being currently considered the world’s most valuable startup. However, some industry analysts believe the 30 percent discount is normally applicable to companies on the verge of being acquired by another bigger firm at an even price cut, meaning it might be too steep for a startup that's planning an initial public offering in 2019.