A few days ago, when the board of Snapdeal rejected an acquisition offer of $800-850 million from Flipkart, the latter is expected to revise it to $900-950 million, according to PTI.
The offer revision matches to the demand of Snapdeal’s board and stands close to the initial asking price of $1 billion for the acquisition of the e-commerce marketplace.
Earlier, the board had felt the acquisition proposal of $800-850 million undervalues the company as the due diligence report was clean.
One of the sources said to PTI, a new offer of $900-950 million is likely to be made by early next week.
However, the agency couldn’t confirm the news as Snapdeal, SoftBank and Flipkart declined to comment.
SoftBank, Snapdeal’s largest investor, has been proactively mediating the sale for the past few months. The board also has representation from Snapdeal founders (Kunal Bahl and Rohit Bansal), NVP and Kalaari Capital.
SoftBank has been pushing for the merger since the start of the year. But, the transition has hit multiple hurdles as discord between board members hasn’t been ironed out.
Initially, it was stuck owing to disagreement between board members on the special payout for the deal. While the board members came along largely for a sale, most recently, the company also received back to back communications from minority shareholders – led by Premji Invest – asking for a fair treatment as proposed merger talks are underway.
Once Snapdeal was one of the leading contenders in the Indian e-commerce space, however, it saw its fortunes failing amid strong competition from Amazon and Flipkart.
The immense markdown of valuation Snapdeal in just one year speaks volume about the lost competition in the e-commerce market.
Snapdeal’s valuations have also plummeted from about $6.5 billion in February 2016. SoftBank has already written off over $1 billion on a valuation of its investment in Snapdeal.
Besides e-commerce platform, Snapdeal is also engaged in separate discussions for selling Freecharge (mobile wallet operations) and Vulcan Express (logistics arm).