Snapdeal okays Flipkart’s offer

The Snapdeal board is reported to have favoured the revised take-over offer of upto $950 million from Flipkart but is seeking boarder consensus of major shareholders.

According to sources Axis Bank has emerged front runner for Snapdeal’s payment wallet FreeCharge. Snapdeal is seeking views of its shareholders, including Ratan Tata and PremjiInvest on Flipkart’s offer.

PremjiInvest, which is the personal investment arm of Wipro chairman Azim Premji has already written to Snapdeal seeking greater clarity on the deal terms. It has also called for equal treatment of shareholders for payouts from the deal.

Japan’s SoftBank, which is the biggest investor in Snapdeal is keen to finalise the deal and take an equity stake in Flipkart to profit from booming e-commerce market.

The merger of two competitors can create a stronger local company to find off Amazon which is aggressively investing in the country to become number one player in e-commerce segment.

Snapdeal has a number of investors including Ontario Teachers' Pension Plan, PremjiInvest, Ratan Tata, Foxconn, Temasek and BlackRock among others.

Snapdeal’s co-founders Kunal Bahl and Rohit Bansal are reported to be resisting the latest acquisition bid from rival Flipkart. They instead want to merge with listed e-commerce firm Infibeam and raise cash by selling FreeCharge.

Earlier this month, Flipkart had made a revised offer of about $900 million after its first offer of $800850 million was rejected by the Snapdeal board.

The company had rejected the offer saying it was significantly lower than its $1 billion valuation. Compared to a valuation of about $ 6.5 billion in February 2016, the sale to Flipkart could see Snapdeal being valued at about $1 billion.