Mumbai, July 6: The board of Snapdeal has rejected the $850 mn takeover offer of Flipkart. The offer was rejected since it fell short of $1 bn valuation that its biggest investor SoftBank Group Corp had sought through the merger.
Flipkart's offer was only for the marketplace and excluded logistics arm Vulcan Express. Azim Premji had also objected to special payments to certain shareholders. The final price and the fate of the deal depend on negotiations between SoftBank Group Corp. and Tiger Global Management, the two largest shareholders in Snapdeal and Flipkart, respectively.
The deal has hit hurdles right from the start. SoftBank has been pushing for a sale since March after Snapdeal lost out in the e-commerce war to Flipkart and Amazon India.
Snapdeal co-founders Kunal Bahl and Rohit Bansal as well as two key Snapdeal shareholders, Kalaari Capital and Nexus Venture Partners, was initially opposed to a sale but Soft Bank brought them around to pursuing the deal with Flipkart in May.
Significantly, the largest deal currently is Snapdeal’s $400 million purchase of Freecharge in April 2015. Paytm is now in talks to buy Freecharge for just $40-50 million, Mint reported on 11 May.
Snapdeal, which has raised nearly $2 billion in cash, hit a peak valuation of $6.5 billion in February 2016 when it received $50 million from investors.