Uber’s Huffington still ‘optimistic’ SoftBank mega-deal will happen
Uber’s board member Arianna Huffington is still “optimistic” that a big investment by SoftBank into the ride-hailing app will happen, saying on Thursday the problems faced by the company will not affect its valuation.
The Japanese giant run by Masayoshi Son is seeking to invest $10 billion into Uber for a fairly substantial stake. But so far, talks have hit roadblocks as both sides are yet to decide on the pricing of shares.
On October 16, Huffington said that the deal would be “very likely” to close in the next week. That time frame has now passed and no deal has been announced.
At the Future Investment Initiative, a summit held in Saudi Arabia, the media mogul said she was still positive a deal would happen.
“We have to wait and see what the negotiations will bring. But we are all optimistic and we will just have to wait to see how long it’s actually going to take,” Huffington said during a CNBC-hosted panel at the event.
When asked in a follow-up TV interview with CNBC whether many of the scandals and issues Uber has faced will affect the start-up’s valuation, she said “no”.
Masayoshi Son and Uber CEO Dara Khosrowshahi were both at the investment conference in Saudi Arabia. But Huffington did not give a timeline for when the investment could close.
“There are ongoing conversations so I’m sure you will be hearing as soon as we hear at the board level,” Huffington told CNBC.
SoftBank’s investment will be $1 billion to $1.25 billion at the company’s last reported valuation of $69 billion, sources told CNBC. SoftBank also hopes to buy a 14 to 17 percent stake of shares from existing shareholders at a discount, the sources said. Thus potentially bringing the stake to around $10 billion.
Earlier this month, Uber’s board voted to accept the investment from SoftBank.
The Japanese giant has been writing big paychecks to start-ups across the world. An investment of this scale will likely be one of its largest to-date for Uber, and give it firepower to continue aggressively expanding.
Uber has had a tough few months with founder Travis Kalanick stepping down as chief executive following a number of scandals. Former Expedia CEO Dara Khosrowshahi took the helm at Uber in August and has had to tackle more issues including a ban in London for the ride-hailing service, as well as battles in the boardroom with Kalanick.
Huffington addressed the culture of “hyper-growth” at Uber during the summit.
“What was important to also recognize that when you are in the culture of hyper-growth you cannot protect top performers. Top performers have to live by all the same standards as everyone else. And also, the company needs to stand for something more than growth,” Huffington said.
She also said that “a crisis” can be a “catalyst for change” and improvement.
“That’s definitely what we are seeing at Uber right now,” Huffington said.
The entrepreneur also said that the problems at Uber have not hit the company’s bottom line.
“We have had incredible results, growing in multiple cities … So clearly all the changes that have happened in the last few months have made it very clear to riders that we are serious about change that we have accepted all of the mistakes of the past and that all the work that’s being done … have made that very clear that the transformation is happening,” Huffington told CNBC.
Source: CNBC
