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SoftBank will try to buy shares of Uber at a 30 percent discount

It proposes a $48 billion valuation for the ride-hailing company.

A man using a smartphone walks past the SoftBank Group Corp. logo during the SoftBank World 2017 conference on July 20, 2017, in Tokyo, Japan. Tomohiro Ohsumi / Getty Images

SoftBank is preparing to buy shares of Uber at a price that values Uber at only $48 billion, a steep 30 percent discount rate for ownership in the company, which was last valued at almost $70 billion.

That’s in line with what Uber investors were expecting; Recode reported this weekend that the price could be as low as $48 billion or as high as $52 billion. The $48 billion price, confirmed by a person with knowledge of the figure, will however raise concerns about whether the secondary sale will succeed — SoftBank needs to accumulate 14 percent of the company’s shares to trigger the so-called “tender offer.”

Several investors have said privately that they would be unlikely to sell at such a rate. Investors can often buy shares of a company more cheaply on secondary markets — from existing investors — than they can by buying new shares in the company.

Here’s our rundown, handicapping who could sell and who the deal hinges on.

If the price is insufficiently high and SoftBank can’t cobble together a 14 percent ownership stake, the Japanese conglomerate could try and raise its bid in order to attract enough sellers. This first round will run for 20 business days.

The full details will be circulated to shareholders on Tuesday. The $48 billion price was first reported by Bloomberg.

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