Uber gives the green light to Softbank deal

Uber - [https://media.boingboing.net/wp-content/uploads/2016/01/uber.jpg]

Uber has allegedly agreed to give SoftBank Group the green light for a much anticipated investment, reveals a leading technology house.

Statement by Uber

“We’ve entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment. We believe this agreement is a strong vote of confidence in Uber’s long-term potential. Upon closing, it will help fuel our investments in technology and our continued expansion at home and abroad, while strengthening our corporate governance”. 

Although Uber had not elaborated on plans of the investment, the deal reportedly includes a $1 billion investment in the company. This comes after the last private valuation of nearly $70 billion. 

The SoftBank group is also expected to increase its ownership in the global transportation technology company. The reported advancement includes the telecommunications conglomerate purchasing up to $9 billion in Uber shares from employees and other stakeholders. This is expected to bring Softbank’s ownership of Uber to a firm 14%. 

These shares are expected to be purchased at a lower valuation, yet to be determined. 

However, the deal will only materialise once adequate Uber shareholders decide to sell shares. 

It is essentially a package deal with the $1 billion investment in Uber a condition on the finalisation of the tender offer. 

Meanwhile, SoftBank Group sent the following statement on behalf of Rajeev Misra, CEO of SoftBank Investment Advisors, to stress that the deal has not been closed:

“After a long and arduous process of several months it looks like Uber and its shareholders have agreed to commence with a tender process and engage with SoftBank. By no means is our investment decided. We are interested in Uber but the final deal will depend on the tender price and a minimum percentage shareholding for SoftBank”. 

Essentially, this means that although Uber has agreed to move forward with SoftBank’s proposal, the tender offer price is still under negotiation. 

In effect, SoftBank can back down if they do not agree with the value for the tender offer. 

Meanwhile, 40 000 drivers were affected by Uber’s stripped license in London in September. The transport technology and its drivers suffered the loss of license to operate until the end of the month. 

The Transport for London (TfL) cited the following reason for the removal of Uber’s license:

“Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications”. 

Uber has since fired back by declaring to challenge London’s transport regulator. 

Transport for London said Uber would be allowed to continue to operate while the appeals process was exhausted.

“Transport for London and the Mayor have caved in to a small number of people who want to restrict consumer choice,” Uber said in a statement. “We intend to immediately challenge this in the courts”, concluded TfL.