New Delhi: Snapdeal’s board is believed to have rejected a takeover offer of USD 800-850 million (around Rs 5,500 crore) from e-commerce rival Flipkart. As per the sources, Flipkart has completed the due diligence process and has made an offer of USD 800-850 million to buy Snapdeal. However, the offer was rejected by the board which felt the amount undervalues the company.
“The first offer has been rejected but talks are still on. It is an ongoing discussion,” said one of the sources. When contacted, Snapdeal, SoftBank and Flipkart declined to comment, reports moneycontrol.
The deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the Indian e-commerce space.
SoftBank had agreed to cut Snapdeal’s valuation 85 percent to $1 billion for the merger, Bloomberg had reported citing people it did not identify.
Compared to a valuation of about USD 6.5 billion in February 2016, the sale to Flipkart could see Snapdeal being valued at about USD 1 billion. SoftBank has already written off over USD 1 billion on the valuation of its investment in Snapdeal.
Vani Kola, managing director of venture capital firm Kalaari Capital, which holds roughly 8 percent stake in the e-commerce venture, had resigned from the board in May.
SoftBank had pushed for the deal and persuaded the company’s two founders as well as venture backers Nexus Venture Partners to approve it.