A day after Uber said that it has agreed to SoftBank's multibillion dollar investment, the Japanese conglomerate said that it was still only considering the investment and that there was no final agreement at this stage, according to a report in Reuters.
Uber's board already approved a slate of governance reforms that are contingent on completion of the SoftBank deal.
The paperwork's done! The long-anticipated SoftBank Group investment into Uber has been agreed upon, a spokesperson confirms to TechCrunch.
Technically, the deal will only be done once enough Uber shareholders sign up to sell shares. We believe this agreement is a strong vote of confidence in Uber's long-term potential.
SoftBank is to buy the existing Uber shares in a process called a tender offer, which takes at least a month to complete.
As part of the deal, Uber's board agreed to carry out a set of sweeping governance changes, including measures that reduce the influence that Travis Kalanick, Uber's former chief executive, has at the company.
"It depends on whether or not the board can continue to assert some control and maturity on the running of the company", Gold said. A source with knowledge of the matter said that the deal comes with a resolution to have an initial public offering by 2019.
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Jack Gold, president of J. Gold Associates, said the deal with SoftBank suggests the Japanese firm "is now feeling much more comfortable that the board is asserting some control and that numerous bad publicity is behind Uber".
In effect, SoftBank can back down if they do not agree with the value for the tender offer.
Uber plans to run newspaper ads informing investors about the share purchase, and SoftBank will propose a price at which it will buy stock.
The SoftBank group is also expected to increase its ownership in the global transportation technology company.
Uber does not necessarily need new money, as it has raised more than $10 billion in debt and equity and has some $5 billion in the bank. SoftBank is a major investor in Ola and Grab, Uber's rivals in those regions.
The Japanese group, founded by billionaire Masayoshi Son, expressed an interest several months ago in investing around $1 billion in Uber for a stake of at least 14 percent. As the two companies battle for market share, both have lost hundreds of millions of dollars a year.