SoftBank Group has confirmed that it has found likely sellers for the tender offer for Uber’s shares, which launched tonight. These are the shares from existing shareholders that will be sold at more than a 30% discount to Uber’s last private round.
The Japanese investment firm provided us with the following statement.
“SoftBank and Dragoneer have received indications from Benchmark, Menlo Ventures, and other early investors of their intent to sell shares in the tender offer. Any sales by these shareholders will be pursuant to the same terms and conditions as will be offered to all other eligible holders that participate in the tender offer.”
As we reported earlier, the share price SoftBank is presently offering is $32.96, which is beneath the $48.77 per share that Uber was last valued at in its Series G round last year. The new value is under $50 billion.
We’ve also reported that Sequoia is looking to invest in the tender round, alongside TPG and Tencent. And with SoftBank and Dragoneer, the combined investors could buy up to $8 billion in Uber shares.
The tender offer is supposed to last for 20 business days. SoftBank could later raise the share price if they do not find enough sellers.
And while SoftBank is publicly confirming that Benchmark and Menlo Ventures intend to sell shares, we’re hearing that they may be doing a little bit of negotiating through the press. These venture firms are likely sellers, but have not formally agreed to the latest share price.
There is also a planned direct investment of $1 billion into Uber, that is expected to happen at the last private valuation of nearly $70 billion. The secondary transaction and the primary transaction are a package deal.
Uber declined to comment.
Benchmark and Menlo are amongst Uber’s largest shareholders. Benchmark, which has a board seat, has also been involved in a lawsuit against former Uber CEO, Travis Kalanick. This lawsuit pertains to Kalanick’s power to appoint three board seats, including his own. If the deal goes through, Benchmark has agreed to drop the lawsuit, so long as Kalanick gets board approval for future board appointments. Kalanick has already appointed John Thain and Ursula Burns to these roles.
Kalanick resigned in June, following months of negative publicity about the company’s culture. The company has also been involved in a wave of lawsuits, particularly with Alphabet’s self-driving car division, Waymo.
The SoftBank investment would likely be the last private round before Uber does an IPO. The company has said that it hopes to join the stock market in 2019.
It’s a turning point for Uber shareholders, many of whom were unable to sell shares, due to the company’s strict policies. Now “accredited investors” who have at least 10,000 shares will be eligible to sell. This, however, excludes employees and other investors who have less than $1 million in assets or make less than $200,000. While this is the standard requirement for buying shares, it’s less common to have these rules for sellers.
We reported a few weeks ago that the tender offer would kick off today. Part of the motivation to get the deal done was so that employees could turn paper riches into cash before the holidays.