The board of Uber may have reached a deal to let Softbank invest a maximum of ten billion dollars in the company. However, Softbank says that its investment is “by no means decided.”
In a statement, the CEO of Softbank Investment Advisors and a member of the Board of Directors of the Softbank Group, Rajeev Misra, said: “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.”
During the weekend, Uber paved the way for the tender offer of Softbank to proceed. However, sources say that its success is far from guaranteed because of the fractured board of Uber.
Pricing is also another issue as talks on the tender offer have reportedly concentrated on a valuation of about $50 billion. Uber has a current paper valuation of almost $70 billion.
It is uncertain whether existing shareholders will want to sell at the price that Softbank wants to pay.
And if Softbank is not able to buy at least 14% of Uber, it can just walk away.
A source said that eligible employees with stock options are restricted to selling only half their holdings.
Former CEO Travis Kalanick and Benchmark are two of the largest shareholders, and it is not certain whether either party wants to sell any of their stakes.
Sources say tbat the deal was only able to move forward since they finally put aside their newest feud. Benchmark has agreed to suspend its lawsuit against Kalanick and completely drop the lawsuit once the tender offer continues. In return, Kalanick has agreed that his two board seats which are currently held by Ursula Burns and John Thain, would require majority approval from the board if they were to open up.
The stakes are high. If the tender offer of Softbank is successful, it will make way for major governance changes at Uber and brings it closer to a 2019 IPO.