SAN FRANCISCO (BLOOMBERG) - Uber Technologies is seeking to sell part of its US$6.3 billion (S$8.5 billion) stake in China's Didi Chuxing, as it begins to shed minority holdings to raise cash, according to people familiar with the matter.
The San Francisco-based ride-hailing pioneer is beginning to monetise stakes in other companies in an effort to boost its own share price, the people said, asking not to be identified because the discussions are private. Uber shares were down about 3 per cent on Thursday (Sept 17) in New York to US$36.41, well below the US$45 a share at which it went public in May 2019.
Uber chief executive officer Dara Khosrowshahi is in discussions about the sale with Didi and SoftBank Group, the Japanese conglomerate that is a major shareholder in both companies, the people said. While various scenarios are under discussion, one option is for SoftBank to team up with other investors to acquire a minority of Uber's 15 per cent stake, one person said. Didi, which needs to approve any sale, is unlikely to buy shares itself, another person said.
A spokesman for Uber declined to comment. Didi also declined to comment.
The Didi sale would be the latest divestiture by Uber designed to consolidate operations and abandon once sprawling global ambitions. This month, the company agreed to sell its European freight business and some of its stock in Russia's Yandex. It's also negotiating to sell some of its stake in the South-east Asian ride-share company Grab, Bloomberg News has reported.
Uber got its Didi equity after it retreated from China in 2016 and sold its business there to its Chinese competitor. Didi's valuation hit US$56 billion as ride-hailing boomed, but its shares have slid in private-market transactions amid regulatory troubles and the coronavirus pandemic. Uber wrote down its Didi stake to US$6.3 billion from US$8.2 billion in the first quarter.
One issue may be determining the current value of those holdings. In secondary market transactions, sellers are looking to get at least the equivalent of a US$33 billion valuation for their Didi shares, while buyers are seeking prices below that level, according to people familiar with the trades.