Flipkart’s US$ 800 m offer fails to impress Snapdeal board
India's Snapdeal board members had pegged the valuation of the company at US$ 1 billion and rejected the offer made by market leader Flipkart
The much anticipated acquisition in India’s online market place hit a roadblock with the beleaguered Snapdeal rejecting an offer of US$ 800 million made by market leader Flipkart.
Snapdeal board members had pegged the valuation of the company at US$ 1 billion, reports Business Standard. “The board is unhappy with Flipkart pegging the valuation nearly $200 million less, even though Snapdeal cleared the due diligence. The board is, however, hopeful Flipkart would reconsider the offer,” the daily added quoting a source.
Snapdeal’s largest investor SoftBank Group is spearheading the merger and had put forth an exclusivity clause for Flipkart, which ended on July 2 and has not been renewed. However, the Japanese telecom major is hopeful and the timeline deal closure might get an extension, the daily added.
SoftBank is eager to close this deal as it is keen to let go its largely underperforming portfolio in India. The other investors in Snapdeal include Tata Group Chairman Emeritus Ratan Tata, PremjiInvest (the personal investment arm of Wipro Chairman Azim Premji), Ontario Teachers’ Pension Plan, Foxconn, Temasek and BlackRock, among others.
As part of a two-step agreement, SoftBank is expected to invest about US$ 1.5 billion in Flipkart, post the closure of the Snapdeal acquisition.