Partnerships / Acquisitions

Uber In Talks To Give Investor Group More Of A Stake

Ride hailing app company Uber is reportedly considering an offer from an investment group that wants to own a bigger share of the company.

According to a news report in Recode, citing three people with knowledge of the conversations, a group of investors led by General Atlantic and Dragoneer Investment Group has reached out to Uber about acquiring an ownership stake in the company. Uber currently boasts a market value of $70 billion. General Atlantic already owns shares in Uber, noted the report.  

One of the sources told Recode that talks between Uber and the investor group are close to being final, although terms of the deal could materialize during the next thirty days. Another source told Recode the talks are in the due diligence mode, though are in an advanced stage.

The Recode news report noted the deal between would include the purchase of existing shares at a lower valuation. The deal would take place via a current shareholder, although none have volunteered to give up its position in the company as of yet.

As part of the ownership stake deal, investors would also purchase some Uber shares at the current higher valuation so it can maintain its market value. While Benchmark Capital is facing pressure to lower its stake in Uber, if it doesn’t opt to sell any shares, there are other smaller Uber investors are eager to cash out, noted the report. The pricing of the deal is currently a moving target, according to Recode.

The pricing of the investment deal is currently a moving target, Recode reported.

Uber’s former chief executive officer, Travis Kalanick, was forced to resign several weeks ago and is being sued Benchmark Capital. Benchmark Capital is one of Uber's earliest investors and is suing the former CEO on claims of fraud, breach of fiduciary duty and breach of contract, CNBC reported earlier in August.

Benchmark alleges Kalanick concealed the company’s failings and his own mismanagement before the board of directors in order to retain and increase his own power on the board.

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