Softbank wants Flipkart to wait for Amazon offer
ACQUISITION BATTLE Amazon indicates its offer will be 10% higher but other main shareholders of Flipkart not convinced, seek closure of deal with Walmart
NEW DELHI/BENGALURU: Flipkart’s largest shareholder Softbank Group is making a final attempt to convince other key shareholders in India’s biggest online retailer to await an offer from Amazon before agreeing to a sale to Walmart Inc., three people familiar with the matter said.
Amazon has indicated to Flipkart’s board that its offer will be at least 10% higher than that of Walmart, the people said. But except for Softbank, all the other key Flipkart shareholders are in favour of closing a deal with Walmart, the people said, requesting anonymity.
Walmart is close to buying more than 55% in Flipkart, they said, although the US retailer’s final stake could be higher, depending on what Softbank decides.
Flipkart’s key i nvestors, Tiger Global, Naspers and Accel Partners, all of which have representatives on the Flipkart board, are not convinced that a deal with Amazon is practical to pursue, the people said. They Market size (in $ bn) Y-o-y growth (in %) Flipkart had wanted to become a
company But e-commerce market growth has been
in India
are worried that Amazon may decide to back out of a deal altogether. The three investors also believe that India’s antitrust regulator may not clear a merger between Flipkart and Amazon India, which control more than 80% of online retail here.
The clincher for Walmart could be that Tiger Global managing director Lee Fixel, Flipkart’s most influential share- Head, Amazon India Investors and analysts market potential
holder and board member, is pushing hard to complete the proposed deal with Walmart, the people said.
“Softbank is the only one pushing for Amazon because as per the current terms offered by Walmart, they will barely make any money. Because Amazon has indicated it will offer 10-15% more than Walmart, Softbank would prefer to wait,” one of the people said. Walmart will
to reap rewards in India
All the three people said that the deal with Walmart could be finalised next month if Softbank signs off on it.
Flipkart and Softbank didn’t respond to emails seeking comment.softbank and Tiger Global are the two largest shareholders in Flipkart with a 20% stake each. Naspers is the thirdlargest investor in the company with an ownership of nearly 13%.