Flipkart, Snapdeal in $100M duel

bangalore — After Snapdeal’s board rejected a takeover offer from Flipkart Online Services, the two sides find themselves about $100 million apart as negotiations continue, people familiar with the matter said.

Flipkart, India’s largest ecommerce operator, is unlikely to raise its offer above $900 million while Snapdeal is seeking a price of $1 billion, the people said, asking not to be identified talking about a private deal.

Talks could drag on for weeks after Snapdeal rejected an offer of $850 million as too low, the people said.

Efforts by India’s two major e-commerce operators to hash out a merger have stalled on a valuation that has already come down from $6.5 billion.

Snapdeal backer SoftBank Group is pushing for a combination while some investors and the two founders hold out for a better price. As the local players try to reach a resolution, global giant Amazon.com is expanding steadily in the country with chief executive officer Jeff Bezos pledging to invest $5 billion.

Smaller investors in Snapdeal who don’t have a board seat are unhappy over what they say are special payments proposed for two of the early venture capital backers, Kalaari Capital and Nexus Venture Partners, as well as founders of the startup Kunal Bahl and Rohit Bansal.

They want parity for all investors, big and small, people familiar with the talks said last month. Flipkart has required that all investors in its Delhibased rival agreed to a deal.

Representatives for Flipkart, Snapdeal and SoftBank declined to comment.

Snapdeal is being advised by Credit Suisse Group, the people said. — Bloomberg