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

Muscat Daily - - BUSINESS -

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 Ama­ 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.

Newspapers in English

Newspapers from Oman

© PressReader. All rights reserved.