Japan based telecom giant Softbank has joined hands for a deal with the cab hiring giant Uber. Softbank has decided to purchase a significant stake in the cab hiring company. The Tokyo based company has aimed to acquire at least 14 percent of the company which will also have fresh stock. A report said that the fresh stock will consist US$1 billion at the company’s US$68.5 billion valuation.
More reports from a leading daily have mentioned that the entire deal could be worth US$10 billion, however the report also added that if the current investors of Uber do not come to a conclusion on a price to sell their stakes then Softbank might call off the deal. If the deal goes through, then corporate reforms will be enacted. In terms of the new expected changes, new voting changes will be introduced to limit early investors and ex-CEO Travis Kalanick will remain on board. Uber’s board will have six new directors.
The final step of the investment process has come after months of negotiation between Softbank and Uber. Venture capital firm Benchmark, who is an investor in Uber with a US$ 8 billion in the company was earlier suing Kalanick to transfer the board seats to the directors. However, Benchmark has agreed to suspend the lawsuit and if the deal is completed, it will drop the suit.
At present Kalanick looks after three board seats and will then allow the directors to vote on the future appointments that he nominates for the seats. If things go as planned, Softbank will have a stake in one of the major ride hiring companies. Uber in recent times has faced a lot of turbulence in terms of competition, scandals, financial losses, lawsuits and more. If the merger materializes, there are chances that the ride hiring giant can get more opportunities to explore.
Photo Credits: financialexpress