Uber's valuation could be significantly slashed after SoftBank deal

Uber's valuation could be significantly slashed after SoftBank deal

"We are appreciative of the support from Uber's shareholders in the successful tender offer", Rajeev Misra, CEO of SoftBank Investment Advisers, said in a statement.

Softbank will invest $1 billion into Uber in hopes of ridding investor concerns the tender offer lowers the value of remaining shares, the Wall Street Journal reported. The deal will trigger a number of changes in the way the board oversees the company, which is dealing with federal criminal probes, a high-stakes lawsuit and an overhaul of its workplace culture.

As part of the deal, Uber's board will expand from 11 members to 17 members.

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Khosrowshahi, who took the top job in August after Travis Kalanick was forced to step down in June, helped negotiate the deal. Early investors like Benchmark Capital and Menlo are understood to be the ones that are selling the largest amount of Uber shares as part of SoftBank's offer and will see a return of approximately 3,600 times their investment. On Thursday it said that existing investors had agreed to sell enough shares for SoftBank to go through with the transaction. The Japanese telecommunications giant acquired about 15% of the company in the deal, which valued the the company at $48 billion and included an additional $1.25 billion to buy shares directly from the company. The company is also planning an initial public offering in 2019. The closing of the deal will also mark the end of the company's supervoting share structure, moving the company to a "one share, one vote" system that further weakens the influence of early executives and shareholders. SoftBank will get two seats on the expanded board, a source told Reuters.

SoftBank has previously pumped billions into several ride-hailing companies overseas, including Didi in China, Grab in Southeast Asia and 99 in Brazil.

Uber Technologies Inc said in September it was shutting down the auto-leasing business, which had heavy losses. The company still faces numerous legal challenges, including a massive trade secrets lawsuit with Alphabet's self-driving vehicle unit Waymo and multiple government investigations into potentially illegal business practices.

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