US: Uber says no to US$3b Buffet deal

Warren Buffett has confirmed that he has held talks with Uber, with reports saying that his company, Berkshire Hathaway, offered Uber a US$3 billion investment earlier this year.

“I’m a great admirer of [Uber CEO Dara Khosrowshahi],” Buffett told CNBC. “Some of the reported details are not correct, but it’s true that Berkshire had discussions with Uber.”

The investor’s comments were in response to a Bloomberg report that said Berkshire had offered Uber a $3 billion investment, but talks fell apart over the terms and size of the deal. Uber also reportedly tried to talk Buffett into a smaller stake.

Buffett’s offer came shortly after Japanese investment firm SoftBank secured its own stake in the ridesharing company late last year. Shares tendered as part of the deal were equal to 20% percent of Uber’s total value. Softbank was expected to keep its stake at 15%, giving Uber a US$48 billion value, which is approximately 30% lower than the company’s valuation of close to US$70 billion, at the previous round of venture investment.

And last week, Uber announced that investment firms Coatue Management, Altimeter and TPG were planning to buy between US$400 million and US$600 million in Uber stock from existing shareholders, a deal that values Uber at US$62 billion.

The company is hoping for an IPO next year, and if that doesn’t happen, some of its investors could sell their shares on the private market.

“We are off to a terrific start in 2018,” Khosrowshahi said in a statement. “Given the size of the opportunity ahead of us and our goal of making Uber a true mobility platform, we plan to reinvest any over-performance even more aggressively this year, both in our core business as well as in big bets like Uber Eats globally.”

A Berkshire investment surely would have helped Uber ahead of an IPO. Earlier this month, Apple shares set a new all-time high in trading after Berkshire Hathaway bought more shares of the iPhone maker.

“If you look at Apple, I think it earns almost twice as much as the second most profitable company in the United States,” Buffett said at the time.

Full Content: PYMNTS

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.