Moment of Truth for Uber, SoftBank

UPDATE: The SoftBank offer has succeeded, said a person familiar with the deal.

The offer by SoftBank and other investors to acquire a 14% stake in Uber by buying shares from existing shareholders seems likely to pass today, according to some of the shareholders who plan to sell. But the proposed deal, which expires at noon PT today, still isn’t certain, they said. Here is where the situation stands, based partly on previously undisclosed data on the stake sizes of various big shareholders:

The Uber shareholders who matter most in the tender offer led by SoftBank are the Uber founders, early employees and four outside investment firms that initially invested in Uber at anywhere from a roughly $5 million valuation in 2010 (First Round Capital and Lowercase Capital) to a $60 million valuation in 2011 (led by Benchmark) to a roughly $350 million valuation in 2012 (led by Menlo Ventures). Those investors would see a return of anywhere from 93 times to 3,600 times their investment.

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If the 14% threshold isn’t met today, it is possible the deal will simply be dropped. There also is possibility that SoftBank would raise its price and give an extension of 10 days for shareholders to reconsider. Some shareholders desire that outcome and even have tried to convince others not to sell. The deal has been in the works since at least July, when SoftBank talked to Benchmark about buying shares from existing shareholders at a valuation of between $40 billion and $45 billion. Given the drawn-out preparations, the deal’s collapse would be unexpected, even for a company like Uber that has seen one surprise after another this year.

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