Softbank reaches deal to get big discount on Uber shares

New York Uber Drivers Protest Rate Cuts

A consortium led by SoftBank Group Corp will buy a large number of shares of Uber Technologies Inc in a deal that values the ride-services firm at US$48 billion, Uber said on Thursday, in a victory for new chief executive Dara Khosrowshahi.

Last month, Uber disclosed that it had covered up a security breach that had compromised the personal data of 57 million rider and driver accounts, and SoftBank was able to talk down the price of its investment.

The Wall Street Journal reported that Fair will offer jobs to about 150 of the 500 or so employees at Xchange Leasing. Uber lost $1.46 billion in the third quarter this year, up from $1.06 billion in the previous quarter.

Sources familiar with the matter told the publication that stakeholders are tendering 20 percent of the equity in the ride-hailing company.

The tender offer values Uber at $48bn (£36bn), nearly a third lower than its most recent valuation of $69bn.

SoftBank offered $33 per Uber share. That is a roughly 30% discount to its most recent valuation of almost $70 billion.

Uber said it would use the investment "to support our technology investments, fuel our growth, and strengthen our corporate governance".

The deal will also benefit Uber's employees, drivers and riders, said Chris Sacca, founder and head of Lowercase Capital, a major Uber shareholder that did not sell shares in SoftBank's tender offer.

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

As part of the deal, Kalanick agreed that he can not fill the three board seats he controls in the future without majority approval by the board.

SoftBank has previously pumped billions into several ride-hailing companies overseas, including Didi in China, Grab in Southeast Asia and 99 in Brazil. And the Uber deal will add to worries in Silicon Valley that the Japanese conglomerate can make similar demands on other investments.

The investment comes after a year of troubles for Uber, including a lawsuit by Alphabet Inc's self-driving vehicle unit Waymo, that alleges trade secrets theft, and federal investigations that include possible bribery of foreign officials in Asian countries and the use of software to evade regulators.

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