SoftBank and Uber’s deal talks have advanced under Uber’s new CEO

The attempt by SoftBank to acquire a massive ownership position in Uber has entered a new stage — the ride-hailing company is soon to formally offer some of its shares to investors in exchange for billions of dollars from SoftBank.

The green light comes as a 30-day due diligence process that began in mid-August draws to a close. Uber’s shareholders will now deliberate over who will choose to sell their stake in the company — the so-called “tender offer” process that will begin in the next few weeks will give investors a clearer picture of how much they can expect to be paid per share.

A sale from one of Uber’s largest investors to SoftBank, led by its idiosyncratic CEO, Masayoshi Son, could reshape the governance of one of Silicon Valley’s most controversial companies. Uber is mired in multiple federal inquiries and lawsuits, including one brought against its former CEO, Travis Kalanick, by Benchmark, one of his early investors.

Uber is also expected to sell some new shares at a valuation that would preserve, on paper at least, its approximate $70 billion valuation. Any consortium of investors is also expected to include the San Francisco-based Dragoneer Investment Group.

SoftBank’s initial stab at buying shares from a current investor was impeded by the need for Uber to select a new CEO, which some Uber backers insisted had to happen before the SoftBank deal could be vetted. Dara Khosrowshahi, Uber’s new chief, is under the microscope for his thoughts on the proposed deal, which some worry could empower Kalanick and undermine Khosrowshahi’s leadership.

But Khosrowshahi’s attitude toward SoftBank is described as warm. He also sits on the board of directors of Fanatics, a sports retailer that just accepted $1 billion in funding from the Japanese conglomerate. Khosrowshahi was not heavily involved in the financing, but he did approve it, according to a person with knowledge of the deal.

The elevation of Khosrowshahi is likely to raise the share price versus a few weeks ago, according to people tracking the proceedings. SoftBank initially approached Benchmark — and then, later, other Uber investors — for a deal at a valuation of $45 billion. That’s about two-thirds of what private investors last estimated Uber was worth.

It’s also possible that Uber can’t come to terms with SoftBank if investors don’t get a high enough price — few, if any, sellers were prepared to sell their position at the $45 billion valuation. Uber declined to comment for this story.

SoftBank’s initial offer came at a time of great uncertainty for the ride-hailing company. With the selection of a new CEO, who has earned early plaudits from investors, some of the risk SoftBank assumed last month is no more.

If the transaction, which is being advised by Goldman Sachs, happens, the involved bankers would have to secure possibly several sellers in the coming weeks, given the size of the stake SoftBank is seeking.

The most obvious seller had long been assumed to be Benchmark. But the storied venture capital firm is worried that selling its shares would embolden Kalanick and allow him to change Uber’s ownership structure, or cap table, according to a person familiar with the firm’s thinking. If early investors shed some of their position and associated voting shares, Kalanick could gain more internal power, Benchmark fears.

Another lingering force: Benchmark’s lawsuit seeking to boot Kalanick off of Uber’s board of directors. Despite a judge’s ruling to send the case to private arbitration, Benchmark is proceeding with its litigation, according to the person, as part of a way to “keep him honest.” Benchmark and Kalanick in recent days have been haggling over who will serve as the single arbitrator, according to two people.

And if Benchmark isn’t selling? Look for attention to shift to large shareholders like Garrett Camp and Ryan Graves, who may be eager to take some of their money off the table. Kalanick, unsurprisingly, has signaled that he is not looking to sell any of his position.

Then again, savvy sellers likely won’t raise their hands until the last possible moment.

This article originally appeared on Recode.net.