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From: Glenn Petersen9/25/2017 3:57:12 PM
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The Link Between SoftBank, Alzheimer's and Data

By Giles Turner and Jared S Hopkins
September 25, 2017

Hi, it’s Giles from Europe, and Jared from our U.S. health team. We’re going to talk about SoftBank.

We know, We know. Enough already with SoftBank. But bear with us. Because this time it’s not about Uber or WeWork —it’s about how Alzheimer’s and data mining might give us an insight into SoftBank’s investment strategy.

At first glance, it seems as if the Japanese company doesn’t have an investment strategy for its $93 billion megafund. Its bets range from ride-hailing apps to robotics companies to instant messaging tools. This scattergun approach was underscored in late August when SoftBank led a $1.1 billion investment into pharmaceutical group Roivant Sciences Ltd. —one of the biggest-ever biotech investments.

Roivant, founded by ex-hedge-fund partner Vivek Ramaswamy, 32, analyzes data to hunt out unwanted and unapproved drug candidates, which it develops through a range of subsidiaries such as Axovant, which focuses on neurology, Myovant (women’s health and endocrine diseases), Enzyvant (rare diseases), and Urovant ( yep, urology).

It’s crunch time for Axovant right now. Investors and the medical community are waiting to see late-stage results for its experimental Alzheimer’s treatment intepirdine, due in late September.

No drug has yet proven to significantly slow Alzheimer’s and related dementia, which affect about 45 million people in the world. In the past year, experimental drugs from Merck & Co. and Eli Lilly & Co. have joined the dozens of failures aimed at blocking the disease or slowing its progress.

Axovant is currently trading at around $25 a share. If the trial is successful, analysts at Jefferies see the stock reaching $40 to $100 a share, potentially turning a $2.7 billion clinical-stage startup into a $10 billion company.

Not everyone agrees. The trial might fail, or work modestly, and not in a way that will be a commercial or clinical boon, according to Gbola Amusa, an analyst at Chardan Capital Markets who recommends selling the shares. Amusa said in an interview that he’s discouraged partly because similar drugs were unsuccessful and intepirdine’s mid-stage data showed modest benefit.

Wait. It gets more confusing.

The investment into Roivant was led by Akshay Naheta, managing director of SoftBank Group International. Naheta was previously a hedge-fund manager and value investor —meaning he looked for companies that traded for less than their intrinsic value.

So we have former fund manager who is an expert in value investing, not pharma, leading a $1 billion bet on pharma holding group —which may or may not have a lucrative subsidiary in a few weeks’ time.

Still, there’s one piece of the puzzle missing. SoftBank sees its investment into Roivant not as a bet on Axovant, but an investment into data mining within the pharma industry. On Wednesday, Roivant announced the formal launch of its latest subsidiary Datavant, which is using AI to sift through datasets to help get drugs through the clinical trial process. Datavant has already compiled data from 85 different datasets comprising more than 20 million patient visits.

Data is SoftBank’s current dreamboat. It has invested in companies such as graphics chipmaker Nvidia and bought U.K. chipmaker ARM Holdings to tap into the growing need of companies to manage an ever-increasing flow of data.

This is what SoftBank’s investment into Roivant is really about. Not only is there the potential of some immediate short turn upside with Axovant, but if that goes wrong SoftBank is betting that Datavant will keep feeding potential drugs for its other subsidiaries to push through the clinical trial process. It’s a sort of hedge. Like investing in a range of ride sharing apps to either pick the winner or perhaps one day merge them all, or investing in semiconductor companies that in the short term are a cash cow but perhaps later on will be essential to AI.

Yes, it still seems a bit nuts, and there is plenty of intelligent skeptisicm into Roivant’s strategy, but regardless of the industry, where there is data, you may find SoftBank.

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From: Glenn Petersen9/27/2017 5:30:45 PM
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Uber-SoftBank Deal Is Said to Ensure Limits on Kalanick’s Power

By Eric Newcomer, Caroline Hyde, and Giles Turner
September 27, 2017

-- SoftBank to block any plan to make Kalanick CEO or chairman

-- Uber backer Benchmark wants guaranteed check on former CEO

SoftBank Group Corp. has overcome a major obstacle to its planned multi billion-dollar investment in Uber Technologies Inc. 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 private equity 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 Corp. Chief Executive Officer 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.

A legal dispute between Benchmark, Uber’s largest venture capital backer, and Kalanick has hung over investment discussions. But Benchmark doesn’t plan to block a deal as long as the final contract guarantees not to revive Kalanick’s power and provides other governance reforms, the people said. If those conditions are met, Benchmark would sell some of its shares at the direction of Uber’s new CEO Dara Khosrowshahi, the people added.

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.

The board is looking to appoint an independent chairman, a proposal all directors, including Kalanick and Khosrowshahi, support. That was one of a series of recommendations from Eric Holder, a former U.S. attorney general who consulted for Uber after a series of scandals.

Kalanick has told acquaintances he has no intention of trying to return as CEO, but he may someday seek a position as a strategic or operational partner to Khosrowshahi, said people who have spoken with the co-founder.

Khosrowshahi has privately indicated support for a deal with SoftBank at the right price, according to one of the people. His other priorities include allowing employees to sell stock more easily at a fair price, resolving the fight between Kalanick and Benchmark, and leveling the playing field between shareholders with super-voting stock and those without.

Benchmark, which holds stock with outsize voting power, also supports a one-shareholder-one-vote policy. The VC firm and other investors worried that SoftBank could help Kalanick retake the reins through the purchase of super-voting shares, the people said.

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From: Glenn Petersen9/27/2017 9:13:46 PM
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From: Glenn Petersen9/27/2017 9:22:52 PM
1 Recommendation   of 5784
More background on Masayoshi Son:

As the bubble burst, he reportedly lost $70 billion in one day. He admits that 99% of his net worth was wiped out in 2000

The 'crazy' Japanese billionaire who met Donald Trump has a 300-year plan

by Sherisse Pham @Sherisse
CNN Money
December 7, 2016: 10:52 AM ET

Masayoshi Son is not a household name in America. Yet. But the billionaire founder and CEO of Japan's SoftBank ( SFTBF) loves to make a splash and is rapidly gaining a global profile thanks to a series of big deals.

He met with Donald Trump in New York on Tuesday, after which the president-elect tweeted that "Masa" had agreed to invest $50 billion in the U.S. Son said he would pump the money into startups.

Son is obsessed with the future. During an earnings call last month, he said he wanted to be tech's Warren Buffett, and he has a 300-year plan for SoftBank ( SFTBF). Yes, 300 years.

He wants his company to help break down language barriers and allow people to communicate telepathically.

It may seem odd that a billionaire who wants to make silent communication a reality, just met with a billionaire known for loudly expressing his views at massive rallies. But not for Son.

He has a track record of meeting directly with world leaders to talk business. Last week, he chatted with Prime Minister Narendra Modi about SoftBank's $10 billion investment in India's technology sector.

In September, he called on President Park Geun-hye to talk about investing in South Korea.

Despite his ability to open doors, he hasn't always had things easy in the U.S. SoftBank paid more than $20 billion to take control of Sprint ( S) in 2012, but regulators blocked his attempt to merge the struggling mobile carrier with T-Mobile ( TMUS) in 2014.

After Tuesday's meeting, Son said he decided to back American startups because Trump had made deregulation part of his platform.

Son invented a pocket translator when he was 20. He sold it to Sharp Corporation for $1 million.

Tuesday's announcement wasn't the first deal Son has struck after a huge political shift. SoftBank bought Britain's ARM Holdings in a record $32 billion deal less than a month after the U.K. voted to leave the European Union.

" Brexit did not effect my decision," Son told reporters at the time. "I was waiting to have the cash on hand."

Early investor in Yahoo and Alibaba

But the timing of the deal meant Softbank bought a prized asset on the cheap, when the pound was down more than 27% against the yen.

SoftBank has invested in some highly-valued tech startups across the world. Among them: personal finance firm SoFi and Uber competitors Ola in India, Grab in southeast Asia and Didi Chuxing in China, according to PitchBook.

Son was one of the earliest investors in Yahoo ( YHOO, Tech30), from which he made a fortune. He also got in early on Chinese e-commerce giant Alibaba ( BABA, Tech30), taking a 32% stake in the company. bust nearly wiped him out

SoftBank recently took a hit from its Sprint acquisition. But Son has lost big before. As the bubble burst, he reportedly lost $70 billion in one day. He admits that 99% of his net worth was wiped out in 2000.

His latest big venture is a $100 billion fund launched by SoftBank and the government of Saudi Arabia in October. "Life's too short" to do anything small, Son said recently in India.

An avid Tweeter

Like Trump, Son has a huge following on Twitter, and has used it to post thought provoking questions.

In 2010, Son asked his Twitter followers: "What would be the saddest thing in your life?" The most common answers were death, loneliness and despair, according to SoftBank.

In response, the company added a lofty goal to its corporate philosophy: ensuring no one is left alone. SoftBank partnered with Foxconn to make Pepper, a robot pal that learns to love people.

Son also wants to build computers that invent machines to help raise life expectancy to 200 years.

Ethnically Korean, Son was born in Kyusu, Japan. He went to college in the U.S., graduating from the University of California at Berkeley in 1980 with a degree in economics. When he was 20, he invented a pocket translator he sold to Sharp Corporation for $1 million.

Son founded SoftBank in Japan in 1981 with two part-time workers and a small office. Today, he's worth $18.7 billion, according to Forbes.

When the 59-year-old dies -- a few years from now or when he's 200 -- he has said he wants to be remembered as "a crazy guy who bet on the future."

CNNMoney (Hong Kong) First published December 7, 2016: 8:03 AM ET

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From: ProThinker9/29/2017 6:46:48 AM
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Are analysts too bullish in Softbank? Already slightly overvalued based on PE, Price to Sales and Dividend Yield.


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From: Glenn Petersen9/29/2017 11:23:49 PM
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SoftBank Plots Deals to Build $300 Billion Asset-Management Arm

By Giles Turner Caroline Hyde, and Peter Elstrom
September 29, 2017

-- Unit aims to grow to that size over next four to five years

-- Firm already has $93 billion tech fund, plus Fortress assets

SoftBank Group Corp. founder Masayoshi Son has made a name for himself building a telecommunications and technology empire. He’s now planning an expansion in asset management.

The Japanese firm is eyeing further acquisitions in the financial sector in order to potentially create a $300 billion asset management arm that would also house its $93 billion Vision Fund for technology investments, according to people familiar with the matter.

SoftBank agreed to acquire alternative-asset manager Fortress Investment Group LLC for $3.3 billion in February. Since then, SoftBank executives have discussed various investments in the financial sector, from acquiring traditional investment firms to more surprising moves including stakes in major private equity shops such as KKR & Co., said the people, who declined to comment because the plans are private.

The scale of the plans reveals how the Vision Fund will be just one arm of SoftBank’s push into asset management. SoftBank -- which had no assets under management 12 months ago, and has never before managed third-party assets -- is targeting more than $300 billion across its businesses over the next four to five years, one of the people said.

SoftBank may end up with much less or much more money in the asset management business depending on market opportunities, a different person said.

Besides the tech fund, SoftBank’s assets under management also include $40 billion with Fortress, following the U.S. firm’s sale of fixed-income arm Logan Circle Partners.

Considering TargetsIn comparison Blackstone Group LP, the world’s largest alternative-asset manager, has taken 32 years to grow to $371.1 billion under management, as of June 30.

SoftBank is considering a range of targets. A small group of senior executives informally discussed taking a stake in KKR this year, the people said. It is not known how far these discussions went.

A spokeswoman for New York-based KKR, which has a market value of about $16.4 billion, declined to comment. The investment manager oversaw $148.5 billion in private equity holdings, credit assets, real estate and hedge funds as of June 30, up 13 percent from a year earlier.

SoftBank spokesman Matthew Nicholson declined to comment.

The asset management industry is in a state of flux, with smaller players struggling due to growing pressure on fees and the continuing shift to passive strategies. Natixis SA and BNP Paribas SA are among firms exploring a deal with Axa SA’s European asset-management unit, people with knowledge of the matter have said, while Standard Life Plc has combined with Aberdeen Asset Management Plc to form the U.K’s largest active money manager.

Alternative Investments

SoftBank’s acquisition of Fortress was a departure for the company, which previously focused on deals in telecommunications, internet startups and e-commerce. However, Son and his senior executive team are keen to expand SoftBank’s ability to manage alternative investments, as well as manage the company’s ever-growing portfolio, the people said.

The giant tech-focused Vision Fund, backed by Saudi Arabia, Abu Dhabi, as well as Apple Inc. and Qualcomm Inc., has already become the world’s biggest private equity fund.

Major deals involving the Vision Fund include the $32 billion acquisition of ARM Holdings Plc, the chip designer Son believes will play a key role in the Internet of Things, and billion-dollar investments in Didi, the biggest ride-hailing service in China, and southeast Asian operator Grab.

SoftBank has been assembling an array of former bankers with strong networks in the financial sector. Colin Fan, the former equity derivatives trader and co-head of Deutsche Bank AG’s investment banking and trading unit, joined SoftBank this year, while Rajeev Misra, a former senior banker at Deutsche Bank and UBS Group AG, is the Japanese company’s head of strategic finance and a member of the fund’s investment committee.

The Vision Fund has also been staffing up with investment professionals, hiring 70 people in the front and back office over the past seven months.

The fund, headquartered in London but with offices in Tokyo and Silicon Valley, plans to finish fundraising at $100 billion in the next two months, two of the people said.

— With assistance by Devin Banerjee, Dinesh Nair, Manuel Baigorri, Ruth David, and Pavel Alpeyev

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From: Glenn Petersen10/1/2017 10:39:43 PM
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The resolution of them power struggle at Uber could determine if Softbank actually makes an investment in the company:

Inside the Latest Power Struggle at Uber

New York Times
October 1, 2017

The latest board fight at Uber is over a proposed plan that would expand the powers of the company’s new chief executive, Dara Khosrowshahi. Credit David Ryder/Bloomberg

SAN FRANCISCO — The phone calls began late Friday among Uber’s new chief executive, Dara Khosrowshahi, and the ride-hailing company’s executives, as well as board members and a raft of lawyers. They were facing an emergency.

The problem was that Travis Kalanick, Uber’s former chief executive and a board member, had appointed two new directors — Ursula Burns, the former chief executive of Xerox, and John Thain, the former chief of Merrill Lynch — to the privately held company without informing them. The moves, which pushed the nine-member board to 11 people, gave Mr. Kalanick new potential allies on major decisions at Uber.

Mr. Kalanick’s actions were “disappointing,” Mr. Khosrowshahi wrote on Friday in a letter to employees that was obtained by The New York Times. “Anyone would tell you that this is highly unusual.”

The trigger for Mr. Kalanick’s move — one made possible by a board vote last year giving him control of three seats — was a proposal that Mr. Khosrowshahi and the investment bank Goldman Sachs, an Uber shareholder, brought to the board on Thursday. The proposal, which is set to be discussed by directors on Tuesday, includes measures that would shift the power on Uber’s board by reducing Mr. Kalanick’s voting clout, expanding Mr. Khosrowshahi’s powers and imposing a 2019 deadline on the company to go public, according to three people with knowledge of the proposal who asked to remain anonymous because they were not authorized to speak publicly. Parts of the proposal were also read to The Times.

The power shift proposed by Mr. Khosrowshahi and Goldman Sachs spurred Mr. Kalanick to act to reassert control, according to a statement Mr. Kalanick issued on Friday. That has now plunged Uber into another period of uncertainty and a corporate governance crisis, at a time when the company had been trying to move beyond its controversial past with a new chief executive on board.

Uber is “attempting to copy some things that characterize good governance at a public company,” said Charles M. Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. But, he added, parts of the proposal “typically show up when you have poor management and are generally opposed by public shareholders.”

The governance plan that touched off the latest politicking was created by Mr. Khosrowshahi and Goldman Sachs as part of a bigger effort to finalize a deal to sell billions of dollars of Uber stock to the Japanese conglomerate SoftBank, according to a person briefed on the proposal.

That deal depends on the participation of some early Uber investors, who have said they will not sell their shares to SoftBank unless Uber’s governance structure changes and Mr. Kalanick is barred from returning as chief executive. Those investors include the venture capital firm Benchmark, which put money into Uber early on and has more recently been warring with Mr. Kalanick over his control of the company.

Here are some of the specifics of the proposal that Mr. Khosrowshahi and Goldman Sachs put before the board on Thursday, including details that are in flux, according to the three people briefed on the proposal and the parts of the plan that were read to The Times. Some parts of the proposal were earlier reported by Recode.

¦ According to the proposal, if the Uber board seats currently held by three directors — Ryan Graves, Arianna Huffington or Wan Ling Martello — are vacated, Mr. Khosrowshahi gains the power to nominate directors for those spots. The new directors must be approved by a majority of the board and by a majority of all shareholders.

¦ The plan also includes a proposal to remove the outsize voting power carried in two categories of Uber stock, the Class B common shares and the preferred shares. Class B common shares currently offer their holders 10 to 1 voting power, for example. But under the proposal, that would change to one vote per share. The change would diminish the power of some current shareholders, like Mr. Kalanick, as well as that of Benchmark and other venture investors.

¦ The proposal also suggests that Uber elect only a few board members each year, in effect setting a cap. That would make it hard for an activist shareholder to take over the board.

¦ One part of the proposal takes direct aim at Mr. Kalanick. The measure states that any person who has previously been an officer of Uber can return as chief executive only if he or she can get the approval of two-thirds of the board and 66.7 percent of all shareholders.

¦ The proposed plan also imposes a 2019 deadline for Uber to go public. To ensure that the public offering happens at that time, there is a provision that if more than one third, but less than one half, of the board wants an I.P.O., they can add directors until they have the control over the board they need to make the public offering happen. This provision may be dropped.

¦ The plan does allow Mr. Kalanick to keep his board seat, subject to the approval of Mr. Khosrowshahi. Of the two other board seats that Mr. Kalanick controls, one would be given to SoftBank while the other would be filled by the chief executive of a Fortune 100 company, if approved by the majority of the board and a majority vote of all shareholders. If for some reason Mr. Khosrowshahi rejected the proposed board member three times, he could designate someone for the third seat himself.

For now, most of Uber’s directors are reluctant to oppose the new board appointments of Mr. Thain and Ms. Burns made by Mr. Kalanick, according to two people who were briefed on the calls. Ms. Burns, the first African-American woman to helm a Fortune 500 company, and Mr. Thain, who also ran the New York Stock Exchange, could potentially help Uber address issues around company culture and diversity, and better prepare it to go public.

To employees, Mr. Khosrowshahi wrote: “Just know that the most important work here is the hard work you’re doing on behalf of our company. Keep focused, keep together, and keep going.”

Correction: October 1, 2017
An earlier version of this article misstated the number of members on Uber’s board. The board had nine members before the two new appointments raised it to 11; it was not an eight-member board.

Follow Katie Benner on Twitter @ktbenner and Mike Isaac @MikeIsaac.

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From: Glenn Petersen10/2/2017 4:35:36 PM
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Softbank invests in Uber's biggest Indian rival:

India's Ola Raises $2 Billion From SoftBank, Tencent

By Saritha Rai
@SarithaRai More stories by Saritha Rai
October 2, 2017

-- Investment would help bankroll Uber’s fiercest rival in India

-- Cash influx is second-largest in country after Flipkart

Ola scored $2 billion in new funding from a group of investors including SoftBank Group Corp. and Tencent Holdings Ltd., according to a person familiar with the matter, helping to bankroll Uber Technologies Inc.’s fiercest rival in India.

Other backers in the ride-hailing startup’s latest financing round included a venture capital fund jointly run by Indian industrialist Ratan Tata and the University of California’s investment arm, as well as several U.S. institutional investors, people familiar with the deal said, asking not to be identified talking about a private deal. The company’s valuation after the financing wasn’t immediately clear.

The deal will help Ola to continue its focus on India and build both its supply of vehicles and drivers as well as strategic technology to help it win against Uber, one of the people said. The funding round isn’t finished yet and the amount could change, the person said.

Ola, whose parent is ANI Technologies Pvt., and Uber are competing in one of the world’s most attractive ride-hailing arenas. Ola currently holds the upper hand in the $10 billion Indian market but Uber has been increasing the pressure, via driver incentives and promotions targeted at its rival’s existing markets. The San Francisco-based company is ratcheting up spending in other emerging markets after ceding China to rival Didi Chuxing.

Ola didn’t immediately respond to a request for comment during a public holiday in India. A spokeswoman for SoftBank declined to comment.

Ola has received other financing but the latest cash influx marks the second-largest funding round in an Indian startup, after Flipkart Online Services Pvt., the country’s largest online retailer. The SoftBank Vision Fund and Tencent also invested a total of about $4 billion in Flipkart this year as it vies with Inc., people familiar with the matter have said.

The Ola round, which is nearing completion, already has participation from one of SoftBank’s investment arms, SIMI Holdings Inc. It wasn’t immediately clear if SoftBank’s $93 billion Vision Fund would participate. SoftBank is also considering a multibillion-dollar investment in Uber. Ola’s previous investors include Tiger Global Management, DST Global, Accel and Sequoia Capital.

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From: Glenn Petersen10/3/2017 10:46:30 PM
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Uber board splits difference with Travis Kalanick

Dan Primack
October 3, 2017

Uber's board of directors today failed to approve governance changes that would have formally prevented former CEO Travis Kalanick from ever again taking charge of the company, according to sources familiar with the situation. It did, however, unanimously agree to reduce Kalanick's board power and help better clear a path toward IPO. In short: Everyone feels like they won, although the biggest victor is new CEO Dara Khosrowshahi.

Why it matters: Uber is the most valuable private tech company in the world, and has revolutionized urban transportation. But it has been stuck for months in a board battle that has risked putting the company's progress in neutral.

Who was in the room? New board member Ursula Burns called into today's board meeting. So did Khosrowshahi, who was in London trying to get Uber's license renewed. John Thain, who joined the board with Burns at Kalanick's request, was there in person.

What passed?
  • Super-voting rights are gone, which means shareholders are all "one share, one vote." Note that only early employees actually have shares, whereas over 90% have restricted stock units (which don't have any voting rights).
  • The board will be expanded significantly, which means Kalanick would need support of a majority of independent directors to ever regain the CEO spot or be named chairman.
  • If Uber doesn't go public by two years from now, share transfer restrictions are lifted.
What didn't pass:
  • Eliminating any path to the CEO or chairman seat for Kalanick, although it's now a much higher hurdle.
Uber statement: "Today, after welcoming its new directors Ursula Burns and John Thain, the Board voted unanimously to move forward with the proposed investment by SoftBank and with governance changes that would strengthen its independence and ensure equality among all shareholders. SoftBank's interest is an incredible vote of confidence in Uber's business and long-term potential, and we look forward to finalizing the investment in the coming weeks."

Kalanick statement: "Today the Board came together collaboratively and took a major step forward in Uber's journey to becoming a world class public company. We approved moving forward with the Softbank transaction and reached unanimous agreement on a new governance framework that will serve Uber well. Under Dara's leadership and with strong guidance from the Board, we should expect great things ahead for Uber."

It's still complicated: Just because Uber plans to move forward with the SoftBank investment, that doesn't mean it necessarily happens. The Japanese tech giant still needs to figure out pricing, and then effectively launch a tender with eligible sellers (i.e., investors and early employees, not RSU-holders). No guarantees that it will get anywhere near enough sell-side interest to finalize the deal, as SoftBank requires a minimum ownership stake of around 14%, inclusive of co-investments from firms like Dragoneer and General Atlantic (it had been 17.3%, but got lowered after Didi Chuxing dropped out of the buy-side consortium). Moreover, Uber's board can't actually approve the deal — that would require a shareholder vote, although Benchmark is now likely to vote its shares in favor.

Update: Some additional details reported by Bloomberg.are that Kalanick and Khosrowshahi are barred from chairing board committees. Also, were Kalanick to become CEO again, Benchmark would effectively be allowed to sell all of its shares.

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From: Glenn Petersen10/5/2017 11:14:10 PM
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    Here’s how a tender offer like Uber’s would unfold
    There’s no guarantee that the transaction with Japan’s SoftBank will get done, given how complex and massive this deal is.
    by Theodore Schleifer @teddyschleifer
    Oct 5, 2017, 7:21pm EDT

    SoftBank plans to invest up to $10 billion in Uber. It would be the largest-ever purchase of existing stock in a Silicon Valley startup.

    But there’s no guarantee that it’ll get done, given how complex and massive this transaction is proving to be. If successful, the deal will both reshape how Uber is structured and be the biggest sign yet that the Japanese conglomerate has reshaped Silicon Valley finance in 2017.

    Here's how these deals typically unfold, and how the whole shebang could still fail.

    Broadcasting the deal
    SoftBank agreed this week to buy shares of Uber, most of them from current investors, and a smaller amount of new shares the company plans to issue.

    Since SoftBank is buying shares from existing investors, it needs to broadcast that it is on the market through newspaper ads — and will soon do so, as Recode first reported. It’s perhaps an anachronistic formality, but one that is meant to make sure all existing shareholders are given equal information about the sale process.

    The share price will value initially Uber at around $50 billion, we've reported. That may sound like a large haircut for a company that was last valued by private investors at $68 billion, but the 26 percent savings is a within-the-ballpark discount for a deal of this type.

    To be clear, despite Uber being private, the process here is still regulated by the Securities and Exchange Commission, and in this case, the deal would fall under what might be called an “SEC-lite” offering — subject to some, but not all, SEC regulations explained attorney Jeffrey Selman, who has extensive experience in preparing these offerings. Selman said he typically recommends that private companies prepare documents similar to those that a public company would.

    Once the tender is launched, shareholders would have somewhere around 20 to 30 business days to mull over whether they want to sell their positions. Remember that while Uber has big venture capital investors, it also doled out options to employees, and for some individuals, this is a chance to realize and cash in on an historic investment that could turn them into millionaires (or, for some institutional investors, billionaires!).

    Selling the shares
    Here's where things get tricky. SoftBank is eyeing a minimum of a 14 percent ownership stake. If SoftBank’s offer doesn’t elicit enough sellers to amass that stake, then the tender offer fails and there's no transaction. By the way, that means that the proposed governance changes, which reduces voting rights of early investors and founders — including and especially former CEO Travis Kalanick — falls through, too, and we're back to square one.

    In recent months, several investors have balked at offers lower than the $50 billion valuation SoftBank is offering — some buyers are still holding out hope that it will drop. But the valuation at sale could be considered a clear uptick from the $40 billion to $45 billion initially proffered.

    A lot of the attention will now focus on some of the biggest shareholders of Uber, such as Menlo Ventures, Lowercase Capital and Google Ventures. And, of course, on Benchmark Capital, the venture firm that seems placated by the governance changes that restrict Kalanick, and could now be comfortable with selling some of its holdings. Benchmark wanted to limit Kalanick’s power, and was therefore reluctant to sell any of its position, but now the aggressive CEO may now be constrained by the reforms to Uber’s board.

    Another group of potential sellers: Early employees, who are fully vested at Uber but have options that can be costly to exercise. Employees typically have to front cash in order to make use of their options, and then might have to pay hefty taxes on it — which could lead to a wash, at least on their initial stock sales, explained Larry Albukerk, who runs a secondary market liquidity provider called EB Exchange. ( Here’s more on that from The Information.)

    Not every employee will be able to participate in the tender offer. Employees who arrived after around November 2014 instead received restricted stock units, or RSUs — common stock that eventually vests, but that the company can buy back. Uber employees that hold RSU are free from the fees that hit their colleagues when they exercise their options — but RSU-holders are not eligible to sell their positions in this SoftBank deal.

    What if SoftBank doesn’t find enough sellers?
    Presumably SoftBank would be prepared to raise the price and try the process again, gradually increasing its purchase price until dollar signs flash in the eyes of an eager venture capitalist. But that means preparing new tender documents.

    A company could also extend the life of the tender process beyond 30 days to negotiate and find more sellers, said Selman. At the same time, SoftBank could lower its threshold and agree to take a lower stake in the company, meaning not as many sellers are needed.

    But Uber could also find more sellers than it needs. In an oversubscribed tender, Selman said, there could be an across-the-board cut in the amount that each shareholder is allowed to sell.

    Johana Bhuiyan contributed reporting.

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