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Uber Approves SoftBank's Major Investment Offer

Uber Technologies Inc. approved SoftBank Group Corp.'s (SFTBF.PK) offer to buy a multibillion-dollar stake in the ride-hailing company.

The agreement lets SoftBank and other firms invest up to $1 billion in Uber and proceed with a tender offer in coming weeks to buy up to $9 billion in shares from existing investors. The deal could still fall through if there aren't enough interested sellers. The deal also includes Uber governance changes.

Uber said "We've entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment. We believe this agreement is a strong vote of confidence in Uber's long-term potential. Upon closing, it will help fuel our investments in technology and our continued expansion at home and abroad, while strengthening our corporate governance."

The terms were negotiated for weeks. Uber's board was briefed on the terms Saturday and lawyers had been working to complete the language of the agreement, the reports said citing people familiar with the matter.

As part of the deal, venture capital firm Benchmark agreed to put its lawsuit against Uber co-founder Travis Kalanick on hold and drop the complaint when SoftBank's investment and the governance reforms kick in. Kalanick is agreeing to give Uber's board majority approval over the board seats he controls should he ever need to fill them again, the reports said.

The deal gets Uber closer to clearing a major hurdle as it tries to overcome a series of scandals, leadership turmoil and executive departures. The well-connected Japanese technology company could help Uber strike deals with competitors in India or Southeast Asia.

Uber's board already approved a slate of governance reforms that restrict Kalanick's role at the ride-hailing company, including equalizing the voting power of different share classes and increasing the size of the board to 17 to allow for new independent directors. Those changes are contingent on the SoftBank investing in Uber.

SoftBank, along with Dragoneer Investment Group and General Atlantic, are expected to invest at least $1 billion in Uber and purchase up to $9 billion worth of Uber shares from existing investors. The initial price for the tender offer may not be set for more than a week. SoftBank is expected to buy shares from Uber at the company's current valuation of nearly $70 billion, but the price of the secondary stock sale -- in which existing investors sell -- is expected to be lower, the report noted.

Investors TPG, Tiger Global, DST Global and the Chinese company Tencent Holdings Ltd. may also buy Uber shares as part of the deal, the report said.

by RTT Staff Writer

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