Uber working on deal to sell Xchange Leasing to Fair

Uber working on deal to sell Xchange Leasing to Fair

SoftBank on Thursday completed a tender offer to buy those shares at a discounted valuation of $48 billion, according to sources.

A consortium led by SoftBank Group Corp has successfully bought a large number of shares in Uber in a deal that values the ride-hailing/food delivery firm at $48bn (£36bn), Uber said on Thursday.

SoftBank is also investing $1.25 billion in new capital in Uber at its most recent $70 billion valuation.

The completion of the deal is the first significant achievement for Uber's new CEO Dara Khosrowshahi, who took over in August after an ugly year at the company defined by sexual harassment and discrimination allegations, executive misbehavior, lawsuits, and plenty of finger-pointing within the company's board room.

SoftBank and the rest of consortium, which includes Dragoneer Investment Group, will own approximately 17.5 per cent of Uber, a person familiar with the matter said.

Uber investors and employees tendered shares equal to 20 percent of the company. The Japanese telecommunications giant acquired about 15% of the company in the deal, which valued the the company at $48 billion and included an additional $1.25 billion to buy shares directly from the company.

More news: Briton Laura Plummer jailed in Egypt on drug charges

The blockbuster deal offers a cash infusion to Uber and its shareholders ahead of its actual public offering, which is planned for 2019. One will likely go to Rajeev Misra, chief executive of SoftBank's tech investment fund; no word yet on who will fill the second seat.

"The stockholders did the smart thing", said Erik Gordon, an entrepreneurship expert at the University of Michigan's Ross School of Business.

"We look forward to working with the purchasers to close the overall transaction, which we expect to support our technology investments, fuel our growth, and strengthen our corporate governance", Uber said in a statement.

Travis Kalanick resigned in June as Uber's chief executive but stayed on the company's board of directors.

Some initial investors in the consortium, including General Atlantic, dropped out over disagreement about the price offered to shareholders, Reuters previously reported. Didi last week raised US$4 billion, including some investment from SoftBank.

Uber hasn't had a great year.

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