E-commerce major Snapdeal’s board will seek the views of all shareholders, including Tata group chairman emeritus Ratan Tata and Premji Invest, on the proposed merger with larger rival Flipkart. The company will share details of the deal with all stakeholders.
SoftBank started talks with Tiger Global, lead investor in Flipkart, for the merger five months back. But the deal has moved slowly.
Sources close to the Snapdeal board said the company would get feedback from the investors in the next few days, and the deal might finally get approved.
According to sources, Flipkart has offered $900-950 million for Snapdeal. “The deal is almost through, but there are a few areas of concern,” another source said.
SoftBank, the largest investor in the company founded by Kunal Bahl and Rohit Bansal, declined to comment; Snapdeal did not respond to emailed queries.
Sources said the board of Snapdeal is expected to meet next week. Flipkart’s board is expected to meet this week to discuss the Snapdeal buy-out.
Snapdeal has a number of other investors — Ontario Teachers’ Pension Plan, Foxconn, Temasek and BlackRock, among others.
Premji Invest, the personal investment arm of Wipro Chairman Azim Premji, has already written to Snapdeal seeking greater clarity on the deal. It has also called for equal treatment of shareholders for payouts from the deal.
Japanese telecom major SoftBank spent weeks convincing other large investors, Nexus Venture Partner and Kalaari Capital, to come on board with the merger. The talks were stuck again after Flipkart sent an initial bid of about $800 million.
The board, however, wants to secure at least a billion dollars for Snapdeal, which till last year commanded a valuation of $6.5 billion and was a direct competitor to Flipkart.
Things have, however, gone downhill for Snapdeal since then. The company has let go of nearly 9,000 workers and have been forced to shut down portals such as Exclusively and Shopo.
Till now, Flipkart is the only contender that has sent a formal bid. Talks for a merger with Infibeam also did not work out.
Source: Business-Standard 