Softbank gets NVP’s nod to sell Snapdeal

A NON-BINDING term sheet means that at the end of the due diligence, Snapdeal board as well as Flipkart can walk away from the deal without any obligations. FLIPKART is likely to sign it this week

New Delhi, May 11: Japan’s SoftBank has finally secured the crucial nod from co-investor Nexus Venture Partners (NVP) for sale of Snapdeal to India’s largest e- commerce firm, Flipkart, sources said.

Snapdeal was valued at $6.5 billion in its last funding round in February 2016. The valuation, however, has shrunk since then and the potential deal could see the embattled e-commerce firm being valued at about $1 billion, said market watchers.

SoftBank — the largest shareholder in Snapdeal — had secured a go-ahead from the founders and Kalaari last month.

However, NVP was not in agreement over the valuation suggested by the Japanese firm and hectic parleys were held over the last few weeks to resolve the impasse.

According to people familiar with the matter, SoftBank Group has now reached an agreement with NVP to move ahead with the sale plan.

They said a non-binding term sheet with Flipkart could be signed this week and the due diligence for the deal would commence immediately thereafter.

A non-binding term sheet means that at the end of the due diligence, Snapdeal Board as well as Flipkart can walk away from the deal without any obligations.

Sources said Snapdeal founders would get about $30 million each, while NVP could get close to $80 million and stake in the merged/new entity. Kalaari could get about $70-80 million.

Emails sent to Snapdeal, SoftBank, NVP and Kalaari did not elicit any response.