Uber sells stake to Softbank for 30% discount

Marcus Newton
December 29, 2017

Uber suffered another blow this month when the European Union's top court ruled that the ride-share company should be regulated like a taxi company and not a technology service, a decision that could change the way Uber functions across the continent and crimp its future profit potential. The company still faces numerous legal challenges, including a massive trade secrets lawsuit with Alphabet's self-driving vehicle unit Waymo and multiple government investigations into potentially illegal business practices.

SoftBank's investment is a sign of support from an influential investor for new Chief Executive Dara Khosrowshahi. The bid placed a 30 percent discount on Uber compared to its 2014 valuation of $68.5 billion which made it the world's most valuable startup, with SoftBank also agreeing to inject $1 billion into the company at its old valuation in an attempt to avoid a scenario in which the firm is severely devalued as a result of the move.

A former employee's charges of endemic sexual harassment led to an internal review, London has said it is stripping Uber of its license and recently Uber announced it had covered up a major hack.

According to the Wall Street Journal, a Japanese investor group is now buying up a large stake of Uber - and getting it at a sharp discount, too.

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Once approved, the transaction will value the company at $48 billion.

The Wall Street Journal reported Thursday that SoftBank wants to appoint to Uber's board Rajeev Misra, who runs the Vision Fund, and Marcelo Claure, the chief executive of Sprint. In a recent board agreement, Uber's directors said they expected the company to begin the IPO process by 2019.

SoftBank probably will limit its purchase in the tender offer to 15 percent of Uber, and other members of its group are likely to buy additional shares.

Other reports by MaliBehiribAe

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