Uber Tells Investors It Wouldn’t Pay Above $2 Billion for Lyft
As Lyft Inc. was gauging interest from prospective acquirers, executives from Uber Technologies Inc. told investors in the past few weeks that the company wouldn't pay more than $2 billion to purchase its main U.S. ride-hailing competitor, said people familiar with the matter.
Uber didn't make a formal offer, said the people, who asked not to be named because the discussions were private. Uber had previously considered purchasing Lyft as far back as 2014, and the two San Francisco companies have discussed the prospect informally, one of the people said. Despite executives floating the $2 billion price tag, Uber Chief Executive Officer Travis Kalanick has said privately that he would not support such a deal because he believes it would face intense regulatory scrutiny, the person said.
Regardless, Lyft wouldn't consider $2 billion to be a credible offer, said another person familiar with the matter. Recode reported on Friday that Lyft sought as much as $9 billion but failed to secure serious interest. As fierce rivals, Uber has every incentive to downplay Lyft's value to investors and has done so in the past. Lyft and Uber declined to comment.
An investment from General Motors Co. early this year valued Lyft at $5.5 billion. GM and Lyft have held informal discussions about an acquisition in the past few months, people familiar with the matter said. GM suggested a price of at least $5.5 billion, but the talks never amounted to a formal offer, the people said. The Information, a technology website, reported last week that Lyft rebuffed an approach from GM. The automaker declined to comment.
Lyft has been working with Qatalyst Partners to solicit interest from potential acquirers, people familiar with the matter said. In addition to Uber and GM, Lyft held informal talks with Alphabet Inc., Amazon.com Inc., Apple Inc. and Chinese ride-hailing giant Didi Chuxing, the people said. The New York Times reported on those discussions earlier on Friday.
Last month, Didi said it will acquire Uber's China business after a costly, two-year battle. The deal is expected to breeze past Chinese regulators, which approved a merger last year of Uber's two largest competitors there.
The antitrust environment in the U.S. is far different. Competition between Uber and Lyft has made rides more affordable for Americans. Lyft has managed to claw market share away from Uber in major U.S. cities this year, but at significant financial costs.
Lyft currently has $1.4 billion in cash, a person familiar with the matter said. That gives the company time to continue fighting independently.
—With David Welch, Alex Webb, Brian Womack and Spencer Soper