Snapdeal wants Flipkart to pay $900 million for buyout

Online marketplace Snapdeal has asked bigger rival Flipkart to pay at least $900 million in stock after rejecting the latter’s latest offer to buy the company, two people familiar with the matter said.

Flipkart is yet to respond to Snapdeal’s demand but the company will send a new offer this week that will be higher than its previous bid of $700-750 million, the two said on condition of anonymity.

Mint reported on July 4 that Snapdeal (Jasper Infotech Pvt Ltd) had rejected an offer of $700750 million from Flipkart, which had initially proposed buying Snapdeal for close to $1 billion.

The companies hope to agree on the price and the broad terms of the deal by next week, the people cited above said. After that, the companies will continue to negotiate on the final terms of the transaction, they said. The process of selling Snapdeal’s other businesses, digital payments app Freecharge, logistics service Vulcan and software provider Unicommerce, is picking up pace and deals to sell these three units may be concluded within the next month, one of the two said.

Flipkart and Snapdeal didn’t respond to emails seeking comment. 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. Since then, Snapdeal, which had been running Flipkart close and was bigger than Amazon India at the time, has struggled. It became an also-ran in India’s e-commerce market, cut thousands of jobs and saw an exodus of senior and middle managers. Its board became dysfunctional as the financial interests of investors clashed. Finally, this March, SoftBank Group Corp., the company’s largest shareholder, initiated talks to sell the company.