Turns out, Uber Shareholders Are Eager to Sell at 30% Discount

Big relief for Saudi Arabia: illusory $69-billion ‘valuation’ has been preserved.
Softbank, an acquisitive junk-rated Japanese holding company that also owns about 80% of Sprint, has been preparing for months to buy a large stake in Uber. At the end of November, it launched a tender offer to buy enough shares from investors and employees to give it a 14% stake. It dangled out a price of $33 a share, which valued Uber at $48 billion – a 30% discount from Uber’s ‘valuation’ of $69 billion, which had been established behind closed doors during the last fund-raising round.
The offer at a $48-billion valuation is even lower than Uber’s valuation back in June 2015 of $51 billion.
When the tender offer was started, there was uncertainty if enough sellers would be willing to dump their shares at this discount. The other option for them would be to hold out until the IPO, in the hopes for a better deal. The tender offer expired today at noon Pacific Time.
Turns out, there are plenty of eager sellers – despite any dreams of a blistering IPO: The tendered shares amount to about 20% of the company’s equity, ‘people familiar with the matter’ told the Wall Street Journal. But SoftBank will likely acquire only a 15% stake, ‘the people said.’

This post was published at Wolf Street on Dec 28, 2017.