When will Flip­kart snap Snapdeal?

The DQWeek (Kolkata) - - FRONT PAGE - DQW NEWS BU­REAU Mum­bai

Looks like Snapdeal may fi­nally find a shore for it­self soon as its three big­gest in­vestors— SoftBank Group Corp., Kalaari Cap­i­tal and Nexus Ven­ture Part­ners have de­cided to bury the hatchet, mak­ing way for a pro­posed sale of the e-tailer to one of its big­gest ri­vals, Flip­kart or Paytm.

Cit­ing peo­ple in the know of things, the re­port says that SoftBank held board­room dis­cus­sions propos­ing to buy a part of the stake owned by Kalaari and Nexus. Re­port­edly, both these early in­vestors asked for about $100 mil­lion each from the sale. Fur­ther­more, the pro­posed sale could see SoftBank pick up a 20 per­cent stake in In­dia’s largest com­merce com­pany for about $1.5 bil­lion, in the process buy­ing out $500 mil­lion to $1 bil­lion worth of Tiger Global’s hold- ing in Flip­kart.

Ac­cord­ing to the re­port, all stake­hold­ers are will­ing to reach an agree­ment be­cause “cash is run­ning out” at Snapdeal. “But a com­pro­mise will be reached only if the deal makes fi­nan­cial sense for ev­ery­one,” a source added.

No­tably, Alibaba-backed Paytm had also dis­cussed a po­ten­tial ac­qui­si­tion of Snapdeal, but the val­u­a­tion of­fered by it was much lower than Flip­kart, added an­other source.

The two co-founder­sKu­nal Bahl and Ro­hit Bansal who to­gether own about 6.5 per­cent of the com­pany have also asked SoftBank for a $100 mil­lion pay­out to them and their man­age­ment team in or­der to clear the way for a sale.

Snapdeal was val­ued at $6.5 bil­lion in its last fund­ing round in Fe­bru­ary 2016 but its value in a po­ten­tial deal will be a frac­tion of that, the sources said.

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