Uber is planning to bring in a deal with Japanese technology company SoftBank as a major investor by divulging the deal price early this week through formal tender offers to its investors, two people familiar with the plan stated on Friday, though they didn’t state how much the investors would be offered for the shares.
The start of this tender starts with Uber’s disclosure on Tuesday that it covered up a 2016 data breach that compromised data from some 57 million customers and drivers. This revelation caused governments around the world to start an investigation of the breach and Uber’s handling of the matter. Per one of the sources, investors will have nearly a month to respond.
On November 12, Softbank and Dragoneer Investment Group agreed to lead a group that would invest as much as $10 billion in Uber. They plan to invest $1 billion to $1.25 billion in Uber and buy as much as 17 percent of shares held by existing investors and employees.
As defined by U.S. regulations, selling shareholders must be accredited investors and hold at least 10,000 shares of the firm, Uber said in ads published in the New York Times and the Wall Street Journal.
The $1 billion direct investment made by SoftBank in Uber is expected to have the same valuation. Uber’s employees and existing investors will be paid a lower price for their shares in a tender that will most likely take weeks to complete.
“Purchasers of startup shares through secondary deals service provider SharesPost discount a company’s valuation by as much as 25 percent depending on liquidity options and scarcity,” said Rohit Kulkarni, the company’s managing director for private investment research. That would value Uber at approximately $52 billion.
Kulkarni said he expected SoftBank to apply an “incremental discount” because of the data breach. Verizon, he noted, cut its $4.8 billion Yahoo takeover offer 7 percent following disclosure at the time of breaches affecting 1 billion accounts.
Uber is currently valued at $68 billion and is considered the highest of any venture backed company.