Shareholders would need to agree to a lower valuation.
According to a Thursday report in The Wall Street Journal, Softbank’s stake may be as large as 22% if it can convince existing shareholders to sell on the terms it’s offering. The deal would also involve buying shares directly from Uber.
Softbank is apparently ready to spend $10 billion on the deal, but the auction process it’s after may value Uber at around $50 billion. Uber’s current valuation is about $68 billion, so—although some investors may be keen to cash out after a tumultuous year—the company would have some convincing to do.
What happens next will likely mark the first major event for Uber under the stewardship of Dara Khosrowshahi, who recently took over following the ouster of Travis Kalanick.
Softbank has already invested in other ride-hailing firms such as Didi Chuxing and Ola, the dominant players in China and India, respectively. It most recently put money into Grab, a key Uber rival in Southeast Asia.
According to the WSJ report, the Japanese firm wants two seats on Uber’s board, and it’s willing to placate existing shareholders by investing $1 billion at the company’s existing valuation. Existing Uber investor Benchmark said not long ago that it’s shooting for a $100 billion valuation over the next couple years.