SoftBank buys Uber shares at 30pc discount as investors cash out

A taxi is reflected in a window at the office of taxi-hailing service Uber Inc in Hong Kong China

A taxi is reflected in a window at the office of taxi-hailing service Uber Inc in Hong Kong China

Japanese conglomerate Softbank and its group of investors bought a large stake in Uber that values the ride hailing startup at $48 billion, according to the Wall Street Journal.

Uber said in September it was shutting down the auto-leasing business, which had run up huge losses.

SoftBank itself will keep a 15 per cent stake, while the rest of the consortium will own approximately 3 per cent, according to a second person familiar with the matter.

To pave the way for the deal, Uber previously agreed to add six new seats to its board, two of which will go to SoftBank.

The investor group is also buying about $1.25bn worth of new shares at a price that values the firm at nearly $70bn, a significantly higher price that is similar to what Uber shares fetched in its last fundraising round.

Uber investors and employees tendered shares worth about 20 percent of the company, sources told The Wall Street Journal. 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. That's a roughly 30 percent discount over Uber's most recent valuation of close to $70 billion. Earlier reports have indicated that Dragoneer Investment Group and existing Uber backer General Atlantic may be among the interested parties. The company is also planning an initial public offering in 2019.

Uber said it would use the investment "to support our technology investments, fuel our growth, and strengthen our corporate governance". Kalanick resigned from his post earlier this year after a number of scandals, but still maintains a seat on the company's board of directors, where he is surrounded by allies and controls 16 percent of the voting power.

Softbank has made a series of high-profile tech investments and shown an appetite for investments in ride-sharing, backing China's Didi Chuxing and Southeast Asian taxi-hailing app Grab, among other companies.

Uber hasn't had a great year.

Over the past year, a former employee's charges of endemic sexual harassment led to an internal review, London said it is stripping Uber of its license and Uber revealed it had covered up a major hack.

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