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Uber will sell up to a 20 percent stake in its company to a consortium led by Japanese giant SoftBank Group, according to a report Thursday in The Wall Street Journal (subscription required).
SoftBank itself will assume 15 percent of Uber's shares, while other members of the group will take another 5 percent of the shares, for a total 20 percent stake, the Journal reported.
"We look forward to working with the purchasers to close the overall transaction, which we expect to support our technology investments, fuel our growth, and strengthen our corporate governance," Uber said in a statement.
Uber told CNET it would release a statement later on Thursday outlining the final agreement, but didn't comment further.
Uber's board and shareholders agreed to tender -- or put up for sale -- 20 percent of the company's shares.
Uber is a privately held company (a pre-IPO startup), which is not traded on the open market. Tendering shares allows it to influence who has an important, even a controlling, stake in the company. That entity, or entities, can then vote to influence internal policy.
SoftBank made its intentions to accept Uber's tendering offer clear in an online statement posted in November. Here's the full story.
SoftBank also owns a controlling stake in US telecommunications network Sprint and UK chip designer ARM, and also invests in chipmaker Nvidia and co-working company WeWork.
Why would Uber want to tender 20 percent of its shares?
Uber is in need of reform, and the SoftBank Group's involvement can help secure changes that are already afoot.
These are largely political maneuvers that will inflate Uber's board from 11 to 17 members, change the way shareholders can vote to curb the influence of some early investors and overall limit the power of co-founder and former CEO Travis Kalanick.
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Kalanick, who was well known industry-wide for his aggressive practices growing the ride-hailing startup, was replaced in August by Khosrowshahi, the former CEO of travel site Expedia. Earlier this week, Uber hired Barney Harford as COO, formerly of online travel site Orbitz.
What does SoftBank's involvement mean for Uber's valuation?
SoftBank's investment values Uber at $48 billion, the Journal reported, citing unnamed sources. That's a stark contrast from the roughly $70 billion valuation attached to it earlier this year.
The steep discount for SoftBank's consortium suggests Uber had been overvalued, and it didn't want to pay steep prices per share. However, SoftBank and the rest of the group's members are expected to invest a total of about $10 billion in Uber. Uber and SoftBank will close a $1.25 billion primary investment, an Uber spokesperson told CNET.
Uber's valuation could take a hit in the short term, though with Uber trying to regain its footing, it's too soon to talk IPO.