Uber sells 15% stake to SoftBank

SoftBank becomes an investor in two of India's largest on-demand cab service- Uber and Ola

Soft Bank becomes an investor in two of India's largest on-demand cab service- Uber and Ola

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.

SoftBank will likely limit the stake it acquires to 15% in the tender offer, which values Uber at $48 billion, the [people familiar with the matter] said.

SoftBank is also investing $1.25 billion in new capital in Uber at its most recent $70 billion valuation.

Uber will use the SoftBank funding to invest in its technology, fund its growth and revamp its corporate governance, an Uber spokesman said in a statement. On Thursday it said that existing investors had agreed to sell enough shares for SoftBank to go through with the transaction.

The investor group is also buying about $1.25bn worth of new shares at a price that values the firm at nearly $70bn, a significantly higher price that is similar to what Uber shares fetched in its last fundraising round.

"We look forward to working with the purchasers to close the overall transaction", the Uber spokesperson said.

Rajeev Misra, the chief executive of SoftBank's Vision Fund, a $98bn tech investment vehicle, will join the Uber board, along with a second representative from SoftBank.

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Lucky for Uber, the company will still retain its title of "most valuable startup", as second place goes to WeWork, which is now valued at $31 billion.

Some initial investors in the consortium, including General Atlantic, dropped out over disagreement about the price offered to shareholders, Reuters previously reported.

When the deal is completed, the company will make governance changes, including expanding its board from 11 to 17 members including four independent directors, limiting some early shareholders' voting power and cutting the control wielded by former chief executive Travis Kalanick.

SoftBank has previously pumped billions into several ride-hailing companies overseas, including Didi in China, Grab in Southeast Asia and 99 in Brazil.

Uber said the investment would fuel its expansion and technology investments.

The moves come as Uber concludes a hard year, in which it faced a sexual harassment scandal, investigations by regulators and a lawsuit over allegedly stolen technology, among other challenges.

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