SoftBank will soon see whether it has finally acquired a multi-billion dollar ownership stake in Uber — or whether the seemingly endless drama between the Japanese investor and the world’s most valuable startup has more scenes left.
The proposed deal, which would also deeply reshape how Uber is governed, expires today at 12 pm PT. But because of a strict anti-collusion agreement pushed by SoftBank, existing major Uber investors are largely in the dark as to whether they will be able to sell their lucrative shares at all.
SoftBank is offering Uber investors just under $33 per share in an attempt to purchase up to one fifth of the company. The deal is important not just because of the massive amount of cash that would change hands, but also because the deal would trigger a series of reforms meant to mollify the warring factions in Uber’s boardroom.
Employees and institutional investors each have to decide whether that share price — a 30 percent discount from the company’s last valuation — is enough of a payout. If the SoftBank-led group is unable to cobble together at least 13.4 percent of the shares in the company, then the transaction fails and Uber’s governance crisis would deepen.
But on the eve of the deadline, Uber investors confess to little knowledge about whether enough employees or major shareholders have turned in documents volunteering to sell. Why? Because the anti-collusion mandate — a “gag order” in the eyes of some — means that Uber’s owners can’t tell one another whether they’re selling.
So it’s anyone’s guess.
A few tea leaves, though: SoftBank has not yet chosen to extend the 20-business-day schedule for a sale, even though it had the right to do so. That decision leads some Uber insiders to believe that the buyers expect to achieve the minimum threshold for the deal. (SoftBank could also extend the deadline at the last minute.)
And other Uber insiders describe SoftBank’s and Uber’s “brilliant job scaring” existing investors into selling, in the words of one person familiar with the process.
As typically happens with highly sensitive, deadline-driven transactions like this one, many of the bids to sell were expected to arrive in just the final few days before Thursday’s cutoff.
The deal is being brokered by Gregg Lemkau, the co-head of investment banking at Goldman Sachs, according to multiple people with knowledge of the process.
Several investors have complained that the discount remains too severe and have speculated that this initial offer is merely a “low-ball” meant to set the terms for future offers, during which SoftBank and its co-investors can choose to raise their offer price.
Some Uber shareholders have even pressed the SoftBank-led group to shrink the number of investors in its consortium, according to one person familiar with the request. The thinking is that if there were fewer potential buyers — six different co-investors have cycled in and out of the deal in recent months — then the minimum ownership threshold needed to complete the deal could be reduced, increasing its chances of success.
Two of Uber’s earliest investors have already told SoftBank that they plan to sell: Menlo Ventures and Benchmark, the elite venture capital firm that led the ouster of Uber’s ex-CEO, Travis Kalanick. But the two firms have said nothing about the amount they will sell, fueling concerns that their offerings will be relatively minor and primarily symbolic.
Kalanick, who owns 10 percent of the company, himself remains a wild card. While he had told associates earlier this year that he had no plans to sell a single share — perhaps with his eyes on his old CEO seat — his feelings now are more opaque to close observers. Some associates of his do predict that he will sell at least some of his shares.
HIs co-founder, Garrett Camp, is widely expected by multiple sources to offer up a substantial amount of his shares in the transaction. Camp could become a cash billionaire with enough of a sale, and he has recently expressed an interest in increasing his donations to charity and philanthropy.
Ryan Graves, Uber’s first employee, is considered by sources to be less likely to sell his Uber winnings.
Uber CEO Dara Khosrowshahi has encouraged all large shareholders to sell at least some of their equity. That pressure has been applied to early institutional investors like First Round Capital and Alphabet-backed GV, two large shareholders whose decisions could determine whether this deal succeeds or fails.
SoftBank would be under no obligation to say the precise percentage of the company that investors offered to sell — but, of course, Uber could choose to announce that anyway.
This article originally appeared on Recode.net.