Oct 24, 2017

SoftBank asks Uber shareholders to keep quiet

Dan Primack, author of Pro Rata

Illustration: Lazaro Gamio / Axios

SoftBank's investment plans for Uber have hit another stumbling block, according to multiple sources. The Japanese giant has asked shareholders like Benchmark to not discuss with peers how much they may sell or at what price. SoftBank views it as an anti-collusion provision, whereas the shareholders view it as a gag order.

Status: This was a bigger problem several days ago than it was today, as many of the shareholders have given verbal assurances that they won't share info. But they won't sign paperwork to that effect — fearing possible liabilities — and it's still a bit unclear if SoftBank will take their word as bond.

Rationale: For SoftBank, this is as much about timing as price, as it fears shareholders will wait until the end of the 30-day period to announce their opposition, thus effectively restarting the process for another 30 days. Or, put another way, exactly what would happen in a tender were Uber publicly-traded.

Dollars and common sense: Shareholders still don't have indication on price. The range on SoftBank's "term sheet" with the Uber board didn't approach the 409a price we reported was the likely tipping point in terms of getting this thing done, but it is allowed to tender at a higher number (albeit not a lower one). And that report came before Lyft raised a major up-round, thus making it harder to SoftBank to push through a deep discount on Uber shares.

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