Uber-SoftBank deal ensures limits on Kalanick’s power
Bloomberg|
Sep 29, 2017, 08.44 AM IST
By Eric Newcomer, Caroline Hyde & Giles Turner
SoftBank Group has overcome a major obstacle to its planned multi billion-dollar investment in Uber Technologies. The Japanese firm agreed to block any attempts to elevate Travis Kalanick, Uber's controversial former leader, back to the company's top ranks, according to people familiar with the discussions.
Venture capital firm Benchmark, which led Kalanick's ouster in June, has sought a guarantee in writing from SoftBank that it would reject reappointing Kalanick as chief executive officer and block his appointment as chairman of the board or head of one of its subcommittees, said the people.
There have been no public proposals like this so far, but Kalanick has privately expressed interest in helping the company in some capacity, said the people, who asked not to be identified because private negotiations are ongoing. Kalanick still retains some power over Uber through his control of three board seats, though two of those remain unfilled.
The SoftBank-led investment in Uber could be the largest private stock sale in history — or it may collapse amid continued infighting. One prospective investor in the deal, Chinese ride-hailing company Didi Chuxing, has walked away, according to people familiar with the matter.
SoftBank and investment firms General Atlantic and Dragoneer Investment Group are still in active talks with Uber. Together, the firms expect to invest at least $1 billion in Uber at a $69 billion valuation, while buying as much as $9 billion in shares from existing investors. The valuation of those shares will be determined by an auction process that's expected to start at about $45 billion, the people said. SoftBank has considered asking for two board seats as part of the deal, and has mulled one of its executives, Rajeev Misra, and Sprint CEO Marcelo Claure as candidates, the people said. (SoftBank owns most of Sprint.)
Another proposal being discussed would give SoftBank one board seat and a board observer seat. Under either proposal, it's unclear whether Uber would create new directors or shuffle its existing eleven board seats. Spokespeople for Uber, SoftBank, Benchmark and Kalanick declined to comment. Benchmark was approached by SoftBank in June about a potential investment and met with founder Masayoshi Son in July in the Bay Area, a person familiar with the situation said.
But the VC firm stalled the process once it began tangling with Kalanick. After leading his ouster, Benchmark sued Kalanick, claiming he defrauded investors to create three board seats that solidified his power. The suit is now in private arbitration. "We are considering, we have great interest" in Uber, Son said in a recent interview.
SoftBank Group has overcome a major obstacle to its planned multi billion-dollar investment in Uber Technologies. The Japanese firm agreed to block any attempts to elevate Travis Kalanick, Uber's controversial former leader, back to the company's top ranks, according to people familiar with the discussions.
Venture capital firm Benchmark, which led Kalanick's ouster in June, has sought a guarantee in writing from SoftBank that it would reject reappointing Kalanick as chief executive officer and block his appointment as chairman of the board or head of one of its subcommittees, said the people.
There have been no public proposals like this so far, but Kalanick has privately expressed interest in helping the company in some capacity, said the people, who asked not to be identified because private negotiations are ongoing. Kalanick still retains some power over Uber through his control of three board seats, though two of those remain unfilled.
The SoftBank-led investment in Uber could be the largest private stock sale in history — or it may collapse amid continued infighting. One prospective investor in the deal, Chinese ride-hailing company Didi Chuxing, has walked away, according to people familiar with the matter.
SoftBank and investment firms General Atlantic and Dragoneer Investment Group are still in active talks with Uber. Together, the firms expect to invest at least $1 billion in Uber at a $69 billion valuation, while buying as much as $9 billion in shares from existing investors. The valuation of those shares will be determined by an auction process that's expected to start at about $45 billion, the people said. SoftBank has considered asking for two board seats as part of the deal, and has mulled one of its executives, Rajeev Misra, and Sprint CEO Marcelo Claure as candidates, the people said. (SoftBank owns most of Sprint.)
Another proposal being discussed would give SoftBank one board seat and a board observer seat. Under either proposal, it's unclear whether Uber would create new directors or shuffle its existing eleven board seats. Spokespeople for Uber, SoftBank, Benchmark and Kalanick declined to comment. Benchmark was approached by SoftBank in June about a potential investment and met with founder Masayoshi Son in July in the Bay Area, a person familiar with the situation said.
But the VC firm stalled the process once it began tangling with Kalanick. After leading his ouster, Benchmark sued Kalanick, claiming he defrauded investors to create three board seats that solidified his power. The suit is now in private arbitration. "We are considering, we have great interest" in Uber, Son said in a recent interview.
