Uber Technologies has given a nod to SoftBank’s offer to acquire a multibillion dollar stake in the company. This is expected to be one of the largest share purchases in a private startup, but the deal isn’t complete altogether.
The agreement will allow investors such as SoftBank, Dragoneer and others to invest $1 million as the minimum amount in Uber to help move ahead with the tendering process of buying up to $9 billion in shares. However, there is still ambiguity on the deal being working out. If there are no sufficient sellers, then there is a possibility of the deal not materializing.
In a statement, Uber said, “We have entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment.” The company further commented, “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 continuous expansion and home and abroad, strengthening our corporate governance.”
The discussion and negotiation on terms of the agreement went on for weeks. The board at Uber has been briefed about the terms and lawyers are now framing the agreement in the right language.
As part of the trade, venture capital firm, Benchmark, decided to drop charges against co-founder Travis Kalanick as well as the complaint. This decision brings with it a sigh of relief as the company fights to overcome the scandals and leadership disasters it has been plagued with.
The board at Uber has already approved the deal which also keeps Kalanick in a restricted role. After a long discussion with Uber, the board decided to buy shares at a single price as long as the long terms sellers are barred from working together.