JAPANESE GIANT Softbank has put in an offer to buy a 14 per cent stake in crapsicab company Uber, thus surprising absolutely no one.
What has come as a bit of a shock, however, is the valuation of the company at $48bn, wiping 30 per cent off its most recent market valuation of $68.5bn.
The deal, which has already been approved by the Uber board, would see the number of directors rise from 11 to 17, whilst removing the influence and voting rights from some of the early shareholders and of course, ousted founder Travis Kalanick.
It emerged just last week that Kalanick has been instrumental in covering up a major hack of customer data in 2016, bringing yet another scandal of just the type that his removal as CEO was supposed to draw a line under.
The hack was already divulged to Softbank at the time the offer was made and it is likely to have affected the share price. Softbank also added that “our information at the time was preliminary and incomplete,”. Doesn’t sound like Uber at all, does it?
Softbank will be joined by California investment group Dragoneer in the consortium, with shareholders given a month to decide. If there aren’t enough willing sellers, Softbank can walk away.
Reuters reports that two of the new directors would be from Softbank, with the other four being independent outsiders.
Although discounting isn’t uncommon when buying stock from existing shareholders, the 30 per cent figure is a larger than average discount more like the company’s valuation of two years ago.
It may impact the planned public flotation currently planned for 2019 and reflects a company in significantly worse shape that Uber actually is.
But with so many skeletons coming out of the closet this year, Uber is in the unique position of being both an incredibly attractive offering on paper, with a significantly sexy future, but equally is a huge risk after being beset by cock-up after scandal after cock-up under Kalanick.
Softbank already owns Boston Dynamics and ARM Holdings, so bring on the tiny mobile robot that will carry you home on it’s back, we say. It’ll be just like Big Hero 6. µ
Source : Inquirer