As part of the deal, venture capital firm Benchmark agreed to put its lawsuit against Uber co-founder Travis Kalanick on hold, and drop the complaint when SoftBank's investment and the governance reforms kick in, the people said.
"We've entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment", Matt Kallman, an Uber spokesman e-mailed Ars in a statement on Sunday. But there will likely be heavy arguments about the shares' worth in the coming weeks.
The move also clears the way for Uber to go public among the most valuable tech firms in the world.
SoftBank is sending tremors through the tech world with its massive new Vision Fund, a venture capital fund intended for startups and expected to dominate the industry before long. The secondary transaction, or the purchases from employees and existing investors, would be at a lower valuation.
Jordi Alba: "Barcelona better without Neymar"
I'm enjoying myself like I haven't for a long time. 'I have regained confidence. Now I have the whole flank and that's brilliant for me.
This new funding deal will only be done once enough Uber shareholders opt to sell their shares. Uber now is valued at $68.5 billion, but stock offers will be based on a lower valuation, so it's unknown just how much the total multibillion-dollar deal will be worth, said the person, who spoke on condition of anonymity because details were not released.
Kalanick, who controls three seats on the Uber board, agreed to allow a majority of board members to vote on any future appointments he makes, according to the person.
"Ending the litigation is a big step forward if it finally ends the specter of Kalanick retaking control", said Erik Gordon, an entrepreneurship expert at the University of Michigan's Ross School of Business. They include removing super-voting rights that gave Kalanick and his allies outsized power, adding new independent directors and increasing the size of the board to 17.
Softbank is reportedly investing at a valuation of around $68 billion, while the purchase of existing shares will be done... The company has threatened to invest in ride-hailing rival Lyft if it does not get the Uber deal done. It is a package deal and the $1 billion investment in Uber is contingent on the tender offer getting finalized.