Uber’s board of directors have finally approved investment by SoftBank following months of tension between board members over the ride-hailing service’s valuation. According to the report, this investment could be worth up to $10 billion. Recent reports suggest that Uber confirmed the deal after the San Francisco, California-based transportation firm agreed to the multi-billion investment by a consortium led by SoftBank and Dragoneer. The investment consists of up to $1.25 billion in cash and a purchase of up to 17 percent of existing stocks from Uber investors and employees, with the terms of the agreement having been inked over the weekend and the tender offer being slated for completion over the next few weeks.
The deal was signed after the venture capital firm Benchmark, which currently holds approximately 13 percent of Uber shares, and former Uber co-founder and Chief Executive Officer, Travis Kalanick, have come to terms with the Japanese conglomerate’s investment offer, a report by Reuters indicate, citing sources privy to the matter. As part of the agreement, Benchmark would withdraw its lawsuit filed against Kalanick in August of this year for fraudulent activities specifically involving the appointment of his cronies to the board of directors of Uber, allegedly with the goal to keep a strong hold of the company in preparation for his plan to return to its top position following his ouster earlier this year. This prompted SoftBank to threaten to drop its proposed investment in Uber if the company’s board was unable to limit the corporate powers of Kalanick. The Japanese telecoms giant wanted to minimize Kalanick’s influence over the company through a clause stipulated in its provisional investment agreement with Uber. The Benchmark lawsuit additionally sought to cancel three seats in the company’s board created by Kalanick last year, with one of the seats being occupied by the former Uber CEO himself, in an effort to remove him from the company completely.
Earlier last month, Uber’s board of directors initially voted to complete SoftBank’s investment proposal in a company dubbed as the world’s most valuable startup. The deal is also believed to be the largest private stock sale ever, with SoftBank committing as much as $10 billion in investment and potentially taking over a substantial portion of the ride-hailing company’s share.