Uber Technologies Inc., the global taxi aggregator, may raise as much as $ 12 billion in funding from SoftBank Group Corp., and Didi Chuxing, along with U.S. equity firms Dragoneer Investment Group and General Atlantic.
Bloomberg reported, Uber’s exclusive talks with the four investors for a potential investment hangs on the outcome of a courtroom brawl between two board members. According to the reports, along with the four investors, China’s Internet conglomerate Tencent Holdings Ltd., has also explored the possibility of contributing funds to the round and Goldman Sachs Group Inc., will be advising Uber on the potential transaction.
The deal, as per people familiar with the development, will consist of 2 components. The first component will allow a fresh investment of $ 1 billion to $ 1.5 billion in the company at the same valuation from last year. The second component is a share buyback plan that will allow a set of its current shareholders to exit at a lower price than the current valuation. The second component of the deal will allow investors to spend $ 2 billion to $ 10 billion buying out shareholders’ stock, depending on the demand from sellers. This exclusive agreement between Uber and the investors temporarily bars other investors from swooping into the agreement.
Talks regarding Uber selling some of their shares to SoftBank Group Corp., and other potential investors were reported last month when SoftBank Group CEO Masayoshi Son said he was interested in investing in ride hailing firms Uber and Lyft.
The deal, which is currently in the due diligence period, could value the San Francisco headquartered company at $ 70 billion. The final decision of the transaction hangs on Uber’s ability to resolve an ongoing fight between two of the company’s largest shareholders and most influential board members. Uber, SoftBank, Didi, General Atlantic, Goldman Sachs, Dragoneer and Tencent have declined to comment.
Currently, former CEO of Uber Travis Kalanick is fighting a lawsuit against early investor, venture capital firm Benchmark for defrauding investors and withholding information from the directors. Although Kalanick has denied the allegations, the lawsuit poses major complications to the deal with regards to whether Kalanick would relinquish his seat or the two empty ones under his control or whether new seats would have to be created.
The company has also been looking for a new chief executive officer since Kalanick stepped down from the post in June this year in the face of mounting pressure from investors.
