Muscat Daily

India’s Flipkart said to make $950mn offer for Snapdeal

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Bangalore, India - Flipkart Online Services Pvt has made a revised bid to acquire rival Snapdeal for about US$950mn, an offer that could lead to a final agreement between India’s two largest local ecommerce providers within three weeks, according to people familiar with the matter.

Snapdeal’s board members discussed the proposal on a conference call on Monday night after rejecting an earlier offer of about US$850mn, said the people, who asked not to be identified. The final price of the current bid will range between US$900mn and US$950mn, depending on the cash and debt on Snapdeal’s balance sheet at the time of signing, they said.

The Flipkart-Snapdeal combinatio­n is aimed at creating a stronger homegrown competitor to Amazon.com Inc, which has been gaining ground in India as it invests what it says will be US$5bn in the market. Japan’s SoftBank Group Corp, which backs Snapdeal, and New York’s Tiger Global Management, a Flipkart investor, have advocated for the merger, which has been under discussion for months.

Separately, Snapdeal has held very early discussion­s with online retailer Infibeam Inc about an alternativ­e offer to combine forces, said one of the people. Infibeam, which went public in April 2016 to become the country’s first listed ecommerce company, has a market value about US$960mn. A deal with Infibeam is less likely than a Flipkart agreement, the person said.

Flipkart and Snapdeal have been in merger talks since at least April as they debate the proper terms of a combinatio­n. One central issue has been that Snapdeal investors will see the value of the business cut by at least 85 per cent from its peak of US$7bn. SoftBank and Snapdeal’s other backers have already agreed to reduce the valuation to about US$1bn.

Still unresolved are objections from Snapdeal’s small investors, including billionair­e Azim Premji, to special payments earmarked for its early investors and two founders. That dispute will have to be resolved by Snapdeal’s board even as it considers Flipkart’s offer.

A Snapdeal board meeting may make a final decision in the coming days and once the deal is accepted and signed, the final closing could be a few months away.

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