SAN FRANCISCO (BLOOMBERG) - Uber Technologies will move forward with a major investment deal from Japan's SoftBank Group and approved a slate of governance reforms that will limit the influence of co-founder Travis Kalanick.
The 11-person board voted unanimously on Tuesday (Oct 3) to approve sweeping changes to the company's power structure, the company said. The plan would expand the size of the board to 17, which would accommodate two spots for SoftBank representatives and more independent voices, said a person familiar with the matter. The SoftBank deal isn't yet finalised, but board approval represents a major step.
SoftBank will invest US$1 billion to US$1.25 billion in Uber at last year's valuation of about US$70 billion, said the person. The Japanese firm will spend billions of dollars on additional stock from shareholders, the person said.
Uber will adopt a policy of one share, one vote, said the person, who asked not to be identified because the details are private. Kalanick and the venture capital firm Benchmark were among those with outsized voting power before the latest changes. The board also set a deadline for the company to go public in the next two years, the person said. If it doesn't, Uber will lift some restrictions on shareholders from selling their stakes.
The moves are expected to mark an end to a legal fight between Uber's largest shareholder, Benchmark, and the former chief executive, officer Kalanick. If the SoftBank deal closes and the governance changes are fully adopted, Benchmark agreed to drop a legal case against Kalanick, two people familiar with the matter said. The case is now in private arbitration.
"The Board voted unanimously to move forward with the proposed investment by SoftBank and with governance changes that would strengthen its independence and ensure equality among all shareholders," Uber said in an e-mailed statement. "SoftBank's interest is an incredible vote of confidence in Uber's business and long-term potential, and we look forward to finalising the investment in the coming weeks."
Kalanick described the changes in an e-mailed statement as "a major step forward in Uber's journey to becoming a world-class public company".
Kalanick will keep his board seat, as will the two people he appointed in a surprise move on Friday. Benchmark declined to comment.