SAN FRANCISCO: Uber Technolgies Inc's warring board members have struck a peace deal that would allow a multibillion-dollar investment by SoftBank Group Corp 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 in Uber with a board seat, and Kalanick have reached an agreement over terms of the SoftBank investment, which could be worth up to US$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 US$1 billion to US$1.25 billion and buy up to 17 percent of existing shares from investors and employees in a secondary transaction. Benchmark has agreed to drop the lawsuit it filed in August against Kalanick, an effort to diminish his power at the company, entirely upon the successful completion of the investment.
In turn, Kalanick must first receive majority board approval should he want to replace two of the board seats over which he has control, according to one of the sources.
(Reporting by Heather Somerville; editing by Diane Craft)