Uber Technologies Inc. former CEO and co-founder Travis Kalanick will sell 29% of his stake of 10% in the company at a price of approximately $1.4 billion, said a person who is close to the situation on Thursday. Kalanick was forced out as the CEO last June following several scandals that rocked the ride-hailing company.
The sale by Kalanick is one piece of a deal reached with a consortium that is led by Japan-based SoftBank Group Corp that is taking a stake of 17.5% in Uber, through mostly buying up shares from employees and early investors.
Last week, SoftBank secured an agreement with different shareholders who said they would sell, and this deal will close in early 2018, said Uber.
The deal with SoftBank places a value of Uber at approximately $48 billion, which is approximately a 30% discount from the most recent value given the company of more than $68 billion.
However, this investor consortium will make an investment of $1.25 billion in fresh funding at the higher valuation.
Kalanick offered to sell 50% of his stake, but due to a limit on the amount that SoftBank can purchase, he will only be selling 29%, said the source. Other investors were not able to sell the number of shares they hoped due to such a widespread interest in selling.
The former chief executive has 10% ownership in the business, which means that his sale of 2.9% in shares will earn him approximately $1.4 billion said the source.
A Kalanick spokesperson declined comment, when asked.
This sale would make the co-founder of Uber an instant billionaire and not only on paper. Kalanick has not sold any of his shares previously of the business that he operated for close to a decade, said the source.
The deal with SoftBank offers its investors and its employees what is their best opportunity to sell their shares in a transaction that is company approved, prior to Uber’s long anticipated initial public offering that is planned for some time in 2019.
This transaction is also a big feather in the cap of new chief executive Dara Khosrowshahi, who was very influential in brokering the deal and who will be a benefactor of an investor with such deep pockets like SoftBank is.
The new Uber CEO is also trying to put the problems and scandals of the last 18 months behind the company as it enters the New Year.