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Japan's SoftBank: 'No final agreement' on Uber

Business2017-11-14

Japanese tech giant SoftBank Tuesday said there was "no final agreement" on an investment in Uber and warned it could pull out of a potential deal if the terms were unsatisfactory. The statement came after Uber said it had entered an agreement with a consortium led by SoftBank and investment group Dragoneer on what it termed a "potential investment". Uber unveiled the deal after former CEO Travis Kalanick and an influential investor reportedly buried the hatchet after a long feud. ‍Uber CEO Travis Kalanick /VCG Photo But the Japanese firm voiced caution, saying: "While the SoftBank Group side is considering an investment in Uber, there is no final agreement at this stage." "If conditions on share price and a minimum of shares are not satisfactory for the SoftBank Group side, there is a possibility the SoftBank Group may not make an investment," the statement added. The Japanese group, founded by billionaire tycoon Masayoshi Son, expressed an interest several months ago in investing around 1 billion US dollars in Uber for a stake of at least 14 percent. A deal would be positive for Uber, which is seeking to turn the page after recent repeated scandals, among them workplace sexual harassment allegations. Meanwhile, SoftBank has been diversifying through investment for several years, and has ventured into sectors outside its core mobile technology business – completing deals with the likes of French robotics firm Aldebaran and e-commerce with Chinese giant Alibaba. It is sending tremors through the tech world with its massive new Vision Fund – a venture capital fund with 100 billion US dollars coffers intended for startups and expected to dominate the industry so thoroughly it is playfully referred to as a "gorilla". SoftBank shares were down 0.75 percent on the news with Makoto Sengoku, market analyst at Tokai Tokyo Research Centre, saying that investors were underwhelmed with the news. "It's good that SoftBank is always positive towards investing in fast-growing companies. But if you look at its earnings report, net profit was not growing even while operating profit was up," Sengoku said. "You cannot expect quick returns on your investment when net profit is not growing," added the analyst. (AFP)

Japanese tech giant SoftBank Tuesday said there was "no final agreement" on an investment in Uber and warned it could pull out of a potential deal if the terms were unsatisfactory.

The statement came after Uber said it had entered an agreement with a consortium led by SoftBank and investment group Dragoneer on what it termed a "potential investment".

Uber unveiled the deal after former CEO Travis Kalanick and an influential investor reportedly buried the hatchet after a long feud.

 ‍Uber CEO Travis Kalanick /VCG Photo

‍Uber CEO Travis Kalanick /VCG Photo

But the Japanese firm voiced caution, saying: "While the SoftBank Group side is considering an investment in Uber, there is no final agreement at this stage."

"If conditions on share price and a minimum of shares are not satisfactory for the SoftBank Group side, there is a possibility the SoftBank Group may not make an investment," the statement added.

The Japanese group, founded by billionaire tycoon Masayoshi Son, expressed an interest several months ago in investing around 1 billion US dollars in Uber for a stake of at least 14 percent.

A deal would be positive for Uber, which is seeking to turn the page after recent repeated scandals, among them workplace sexual harassment allegations.

Meanwhile, SoftBank has been diversifying through investment for several years, and has ventured into sectors outside its core mobile technology business – completing deals with the likes of French robotics firm Aldebaran and e-commerce with Chinese giant Alibaba.

It is sending tremors through the tech world with its massive new Vision Fund – a venture capital fund with 100 billion US dollars coffers intended for startups and expected to dominate the industry so thoroughly it is playfully referred to as a "gorilla".

SoftBank shares were down 0.75 percent on the news with Makoto Sengoku, market analyst at Tokai Tokyo Research Centre, saying that investors were underwhelmed with the news.

"It's good that SoftBank is always positive towards investing in fast-growing companies. But if you look at its earnings report, net profit was not growing even while operating profit was up," Sengoku said.

"You cannot expect quick returns on your investment when net profit is not growing," added the analyst.

(AFP)

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