Uber Approves SoftBank Multibillion-Dollar Investment Offer

Uber approved SoftBank’s offer to buy a multibillion-dollar stake in the ride-hailing company, setting the stage for one of the largest private startup deals ever, according to Bloomberg.

The agreement lets SoftBank and other firms invest up to $1 billion in Uber and proceed with a tender offer in coming weeks to buy up to $9 billion in shares from existing investors. The deal could still fall through if there aren’t enough interested sellers. The deal also includes Uber governance changes.

“We’ve entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment," Uber said in a statement. "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.“

The terms were negotiated for weeks, according to people familiar with the matter. Uber’s board was briefed on the terms and lawyers had been working to complete the language of the agreement. As part of the deal, venture capital firm Benchmark agreed to put its lawsuit against Uber co-founder Travis Kalanick on hold and drop the complaint when SoftBank’s investment and the governance reforms kick in. Kalanick is agreeing to give Uber’s board majority approval over the board seats he controls should he ever need to fill them again.

SoftBank, along with Dragoneer Investment Group and General Atlantic, are expected to invest at least $1 billion in Uber and purchase up to $9 billion worth of Uber shares from existing investors. The initial price for the tender offer may not be set for more than a week. SoftBank is expected to buy shares from Uber at the company’s current valuation of nearly $70 billion, but the price of the secondary stock sale, in which existing investors sell, is expected to be lower. Investors TPG, Tiger Global, DST Global and Tencent may also buy Uber shares as part of the deal.

The transaction may make Kalanick a cash billionaire if he decides to sell a large enough chunk of his stake in the company. The deal could also be the largest private stock sale ever, and will create a host of new San Francisco millionaires as early employees sell shares.