Uber gives green light for sale of stake to Japan's SoftBank

SoftBank is to buy the existing Uber shares in a process called a tender offer, which takes at least a month to complete.

According to the New York Times, the terms of the agreement include suspending and ultimately scrapping the lawsuit Benchmark filed against embattled former CEO Travis Kalanick.

Uber Technologies has made a decision to accept the investment proposal led by Japanese tech conglomerate SoftBank to pick up majority stake, bringing months-long negotiations to a close, according to latest news reports.

"We believe this agreement is a strong vote of confidence in Uber's long-term potential", it added.

The ride-hailing company said the money would fuel Uber's expansion and investments in technology.

The Benchmark-Kalanick lawsuit is almost dead, but this isn't a clear victory for Uber's ex-CEO. He still has a seat on the company's board.

The Japanese tech and telecoms firm has become a prolific investor in ride sharing firms such as China's Didi and India's Ola as it works to achieve SoftBank founder Masayoshi Son's vision of a future driven by artificial intelligence and interconnected devices.

But the Japanese firm voiced caution, saying: "While the SoftBank Group side is considering an investment in Uber, there is no final agreement at this stage".

SoftBank, along with Dragoneer and General Atlantic, are expected to invest at least $1 billion in Uber and purchase up to $9 billion worth of Uber shares from existing investors. In this process, a price will be decided for existing Uber shares. A source with knowledge of the matter said that the deal comes with a resolution to have an initial public offering by 2019.

Investors TPG, Tiger Global, DST Global and the Chinese company Tencent Holdings Ltd. may also buy Uber shares as part of the deal, the people said.

If investors are reluctant to sell and SoftBank cannot hit its threshold of 14 per cent ownership of Uber, SoftBank can walk away from the deal.

The transaction may make Kalanick a cash billionaire if he decides to sell a large enough chunk of his stake in the company.

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