This article was originally published on TipRanks.com
Uber (UBER) has opened talks with the management of its Middle East Unit, Careem, as it looks to take in outside investors. Citing sources familiar with the matter, Reuters reports that the ride-hailing services provider will remain as one of the shareholders despite the planned outside investment drive push. UBER shares rose 7.36% to close at $38.49 on December 6.
Uber is a transportation networking company offering ride-hailing services. In addition, it operates a food order and delivery service under Uber Eats, and freight transportation under Uber Freight.
Careem Investments Push
It is not yet clear how much outside investment Uber is seeking with the push. Nonetheless, a good chunk of the funds will go into growing the Careem business empire, focusing on payments and delivery. While it is not clear how the ownership structure will be after the outside investment, the early indication is that Careem management will be accorded greater decision-making power.
The push for outside investment is part of an effort to enhance the rollout of Careem’s Super App. Reuters reports that the Super App will offer additional services outside the core ride-hailing business, focusing on food delivery, digital payments, and courier services.
The outside investment push and expansion drive come just two years after Uber bought the Dubai-based Careem for $3.1 billion. The ride-hailing unit currently operates in the Middle East and has been able to keep its brand and app intact after the Uber investment.
Last month, Morgan Stanley analyst Brian Nowak reiterated a Buy rating on Uber with a $72 price target implying 87.06% upside potential to current levels. The bullish rating followed the unveiling of Uber One, a lower price multi-product offering poised to strengthen the company’s competitive edge.
Consensus among analysts is a Strong Buy based on 19 Buys and 1 Hold. The average Uber price target of $69.75 implies 81.22% upside potential to current levels.
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