Uber’s boardroom settles mess, clears way for SoftBank’s multibillion-dollar investment

The Jolt Journal (https://joltjournal

With the mess that was happening in Uber’s boardroom, the dust seems to have settled. A “Peace Deal” has been reached in the Uber boardroom that is expected to be signed soon. This agreement, if it gets signed, will clear the way for SoftBank’s multibillion-dollar investment to make its way into Uber Technologies, Inc.

This weekend was fairly busy for Uber board. First reported by Bloomberg, Uber’s board put in place a wide-ranging agreement that would end the lawsuit and disagreements between former CEO and Uber co-founder Travis Kalanick and Uber’s major investor Benchmark. Sources have confirmed that both sides reached an agreement by giving up some leverage and more compromise on both sides.

“It would have happened sooner, but the paranoia on both sides never let up,” said one source. “It took entirely too long, but we have an agreement.” The source further states that an ultimatum to end the investment move is what finally broke the impasse. This allowed talks to proceed in a less hostile environment.

The agreement — which hasn’t been signed yet — states that former Uber CEO Kalanick will keep his own board seat and also have the right to appoint two other seats. Though he has the right to appoint two seats, they will be subject to majority board approval in the future. Benchmark on the other hand agreed to suspend the lawsuit and drop it entirely once the SoftBank investment is complete.

Even though things seems to be proceeding in Uber’s board, they are proceeding with great caution. The initial tender offer will value Uber between $40 to $50 billion and must be completed. Under the agreement, those employees with stock options will be capped at selling half of their stock holdings. Those with restricted stocks cannot sell them in this round. Aside from that, other shareholders can sell as much as they want. Big investors will more than likely not sell big.

Speaking in terms of Benchmark and Kalanick, it wouldn’t surprise anyone if they didn’t sell any of their shares. Kalanick has been quite stubborn in stock sales until now and Benchmark could sell some, but knowing their track record with the company, aren’t likely to sell a lot. Kalanick isn’t interested in money, according to sources. Though if he did decide to sell even some of his shares, it will make him billions.

If there aren’t enough shares tendered, it could pose a huge problem. SoftBank and its partners — including Dragoneer Investment Group and General Atlantic — are seeking more than 15 percent of overall shares in Uber. SoftBank has already publicly stated that it will not overpay for Uber, which previously saw a valuation up to $70 billion.

The distrust between Kalanick and Benchmark still exists, one source says. Even though this peace deal has been reached in Uber’s board, it still quite fragile. Suspension of the lawsuit by Benchmark is a step in the right direction, but this are proceeding with great caution.

Hamza Khalid

Hamza Khalid is the Lead Editor at The Jolt Journal. You're more than welcome to follow him on Twitter and follow The Jolt Journal on Twitter and Facebook. If you have any questions, concerns, or need to report something in this article, please send our team an email at [email protected]. This story may be updated at any time if new information surfaces.

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