Sat | Nov 17, 2018

Uber valued US$62b in new offer to buy company stock

Published:Friday | May 25, 2018 | 12:00 AM
The Uber website is displayed on a phone in London, on Friday, September 22, 2017.

Three investors are looking to buy stakes in Uber in an offer that values the company at US$62 billion.

The ride-hailing giant said on Wednesday that the investors want to buy up to US$600 million worth of the private company's stock. They're offering US$40 per share, giving Uber a valuation that's nearly 30 per cent above the US$48 billion set in a January stock sale.

The announcement comes as Uber posted a US$2.46-billion first-quarter net profit, largely due to one-time gains from the sale of businesses in Southeast Asia and Russia.

Without the gains, the company still lost money before taxes and depreciation, but the US$304 million in red ink was half the amount from a year ago.

Income statements released on Wednesday show Uber's gross bookings and revenue rose dramatically during the quarter.

In a statement, Uber said that the Coatue Management LLC, Altimeter Capital and TPG investment firms have offered to buy US$400 million to US$600 million worth of Uber stock. The offer, to be launched next week and last for 20 business days, would allow long-time investors and some employees to convert shares to cash ahead of a planned public stock offering sometime in 2019.

Japanese technology conglomerate SoftBank Group Corp and others closed a deal in January to buy 15 per cent of Uber. The investors, including Dragoneer Investment Group, sank about US$9 billion into Uber at roughly US$33 per share, including about US$1.25 billion in new shares.

No new shares will be sold in the latest offer. Eligible sellers will be limited in how many shares they can sell. They can offer 25 per cent of their total shares, or US$10 million worth of stock, whichever is of lower value, according to the company.

The stock offer and Uber's first-quarter numbers point to progress for Uber as it heads towards an initial public stock offering sometime in 2019 that was promised by new CEO Dara Khosrowshahi shortly after his arrival last August.

Uber's gross bookings from ride-hailing and other services rose 55 per cent from a year ago to US$11.29 billion. Net revenue, which is gross bookings minus payments to drivers, incentives and promotions, rose 70 per cent to US$2.59 billion, the company said.

In the first quarter of last year, Uber posted a net loss of US$847 million. Uber had one other previous quarterly net profit, in 2016, on a one-time gain from combining its China operations with competitor Didi Chuxing.

In a statement, Khosrowshahi said the business is beating internal goals as the company cuts losses and holds on to its ride-hailing leadership. "We plan to reinvest any overperformance even more aggressively this year, both in our core business as well as big bets like Uber Eats, globally," he said.

- AP