Softbank’s First Offer to Uber Shareholders Puts a Heavy Price on Scandals

A team of investors led by Softbank Group (sbhgf) has made an offer to buy Uber’s (uber) shares at a valuation of around $48 billion–approximately 30% less than their last private valuation of nearly $70 billion.

As an opening bid in a tender offer, TechCrunch reports the proposed price per share is $32.96, equating to less than $50 billion. The tender process could take weeks to finalize.

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The pricing is a key step in a complicated package deal that will see $10 billion invested into Uber, which is crucial for the company’s reform plans, according to the Financial Times. As part of the deal, a Softbank-led consortium will purchase $1 billion worth of new, preferred shares from Uber at the same valuation from which the company raised money last year ($68.5 billion). In the second part of the deal, which the initial $1 billion is contingent upon, Softbank purchases shares at a discounted price from existing Uber shareholders through a tender offer.

The transactions are structured so as to spare institutional backers of the ride-hailing firm the pain of marking down the value of their investments, while at the same time offering staff an exit well below what they may have been hoping for before the company was hit by a string of governance scandals.

Shareholders will be formally informed of Softbank’s offer on Tuesday, at which point they must decide whether or not to cash out. The offer is conditional on Softbank buying 14% of Uber’s shares through the tender, so if enough shareholders choose not to tender, it may have to raise its price. The FT reported that many shareholders had hoped for at least a $50 billion valuation.

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The steep discount to the last formal valuation reflects the string of scandals that have hit the company in the last year, from fines to leadership changes to an admitted security breach cover up just last week. Last week’s security breach, in particular, has raised questions as to whether Softbank was aware of all the potential liabilities at the company.