SAN FRANCISCO (Reuters) – A consortium led by SoftBank Group Corp () on Tuesday introduced its tender deal for shares of Uber Technologies Inc [UBER.UL] and the Japanese company stated that some notable early Uber investors planned to sell stock.
Venture capital firms Benchmark, which owns 13 percent of Uber worth nearly $9 billion, and Menlo Ventures, another large investor, have indicated that they would offer a part of the shares, according to a SoftBank spokesperson.
Shawn Carolan, managing director at Menlo Ventures and who leads the firm’s Uber financial investment, verified that the company “favors the transaction, and will be tendering a few of our shares.”
The number of it offers, however, depends on the last price SoftBank wants to pay, he stated.
Benchmark decreased to comment.
The SoftBank financial investment would suggest support from an influential financier as the ride-services business battles with several scandals ranging from sexual harassment allegations to federal criminal probes.
The financial investment, if successful, would activate governance changes at Uber, including broadening the board from 11 to 17 members, restricting some early investors’ ballot power and slashing the control wielded by former primary executive Travis Kalanick.
SoftBank would include the investment in Uber to several other bets in the sector, including Singapore’s Grab and India’s Ola.
It is offering to purchase Uber shares from existing investors at an assessment of $48 billion, a 30 percent discount rate to the most current valuation of $68.5 billion, a person knowledgeable about the matter said previously today.
However, SoftBank can still increase the price to encourage more people to sell their shares.
It also would buy $1 billion of brand-new stock at the higher, $68.5 billion assessment but only if it can build up a minimum of a 13.4 percent share of Uber through the tender, another individual familiar with the matter stated on Tuesday. If there were inadequate sellers, SoftBank could walk away from the offer.
Uber said late on Tuesday that the anticipated tender had actually released.
The financial investment comes at completion of a year of controversy and change for Uber, including the announcement recently that the company covered a significant hack in 2016.
One of the people knowledgeable about the matter said that some preliminary members of the SoftBank consortium, including General Atlantic, had actually dropped out over issues consisting of the cost.
Still, numerous investors stayed passionate about Uber and informed Reuters they were not selling. Mitchell Green of Lead Edge Capital, which invested when the business had a $40 billion assessment, has actually stated he aspires to purchase more Uber shares.
Criteria, despite a prolonged fight with Kalanick and other financiers, tweeted in August it believed Uber would deserve more than $100 billion.
Uber on Tuesday launched to investors its third-quarter financial results, publishing a bottom line of $1.46 billion, up about 38 percent from $1.06 billion in the previous quarter and erasing earlier progress in diminishing losses, a source acquainted with the matter informed Reuters.
Its net profits, or Uber’s cut of flight fares, stood at $2 billion, up 14 percent from $1.75 billion in the previous quarter.
The Financial Times newspaper reported Uber’s financial outcomes earlier Tuesday.
As a personal business, Uber is not required to report its profits, however has done so for about the past year in preparation for a going public prepared for 2019.
Writing by Peter Henderson; Editing by Lisa Shumaker and Stephen Coates