Talks Failed After Buffett Tried To Invest $3 Billion in Uber

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By USA International Trade Administration via Wikimedia Commons

On Wednesday, while citing people familiar with the matter Bloomberg reported that earlier this year, Warren Buffett, the billionaire investor, had proposed to invest $3 billion (£2.2 billion) in Uber Technologies Inc. However, the negotiations failed after disagreements regarding the size and terms of the supposed deal.

The report said that the Berkshire Hathaway of Buffett would have given a convertible loan to Uber that would have protected the investment of Buffett should the ride-hailing firm suffer a financial crisis.

Dara Khosrowshahi, the Chief Executive Officer of Uber, suggesting a reduction of the size of the deal to $2 billion, presenting Buffett with a smaller share of the firm. citing a source, Bloomberg reported that the deal failed after the two sides could not agree on terms.

Last March, Uber raised its self-arranged term loan B to $1.5 billion. It was a bridge loan that was largely designed to fund steep cash burn until its planned IPO in 2019.

At the end of the same month, Uber had around $6.3 billion in cash, thanks in part to a direct investment by SoftBank Group Corp and other investors of $1.25 billion.

At a valuation of $48 billion, SoftBank bought in. It was discount from the $66 billion that Uber was once declared to be worth. Last week, Uber announced its first-quarter results and a tender offer that pushes its valuation past $60 billion.

Both a representative for Buffett and Uber did not immediately answer to a request for comment regarding the matter.

During an interview with CNBC on Wednesday, the legendary investor, Warren Buffett, confirmed that he held talks with Uber.

He stated: “I’m a great admirer of [Uber CEO Dara Khosrowshahi].

“Some of the reported details are not correct but it’s true that Berkshire had discussions with Uber.”

An investment from Berkshire could have served to be a stamp of approval for the ride-hailing company before an eventual IPO. Earlier this month, Buffett sent the stocks of Apple soaring when he announced a massive stake in the hardware giant.