Uber’s warring board members have struck a…
Uber’s warring board members have struck a peace deal that would
allow a multibillion-dollar investment by SoftBank Group to
proceed, and would resolve a legal battle between former Chief
Executive Travis Kalanick and a prominent shareholder.
Venture capital firm Benchmark, an early investor with a board
seat in the ride-services company, and Kalanick have reached an
agreement over terms of the SoftBank investment, which could be
worth up to $10 billion, according to two people familiar with
the matter. The Uber board first agreed more than a month ago to
bring in SoftBank as an investor and board member, but
negotiations have been slowed by ongoing fighting between
Benchmark and Kalanick.
SoftBank is leading a consortium of investors that plan to invest
$1 billion to $1.25 billion and buy up to 17 percent of existing
shares from investors and employees in a secondary transaction.
The terms are expected to be signed on Sunday, one of the people
Uber did not immediately respond to a request for comment.
Uber is valued at $68 billion, the most highly valued
venture-backed company in the world. The SoftBank investment is
expected to be at the same valuation, so the company would not
suffer any valuation cut, despite its year of cultural turmoil
and legal problems.
Completing the SoftBank deal would allow Uber to open a new
chapter after a year of controversy, including the resignation of
Kalanick, the ouster of several top executives, sexual harassment
and discrimination allegations, and multiple federal criminal
probes. The deal is also tied to new governance rules that aim to
more equally distribute power and bring more oversight to the
Also it would be a major victory for Uber’s new CEO Dara
Khosrowshahi, who served as a mediator to help broker the
agreement, according to a third person familiar with the matter.
To allow the deal to go forward, Benchmark has agreed to
immediately suspend its lawsuit against Kalanick, which it filed
in August in an effort to diminish the ex-CEO’s power at the
company, one of the sources said.
Upon the successful completion of the SoftBank investment,
Benchmark would drop the lawsuit entirely, the person said.
A spokeswoman for Benchmark did not immediately respond to a
request for comment. A spokesman for Kalanick declined to
In turn, Kalanick must receive majority board approval should he
want to replace the board seats over which he has control,
according to the source. In addition to his own seat, Kalanick
controls two more, which are occupied by Ursula Brown, the former
Xerox Corp CEO, and former Merrill Lynch & CO Inc CEO John
Thain. Kalanick appointed them in August without first consulting
with the board.
Uber’s board already approved a slate of governance reforms that
are contingent on completion of the SoftBank deal. They include
removing super-voting rights that gave Kalanick and his allies
outsized power, adding new independent directors and increasing
the size of the board to 17.
Uber plans to run newspaper ads informing investors about the
share purchase. SoftBank will propose a price at which it will
buy stock, and if it doesn’t get enough buyers, it could propose
a higher price or walk away. The company has threatened to invest
in ride-hailing rival Lyft if it doesn’t get the Uber deal done.

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