Snapdeal calls off sale to Flipkart

mumbai — INDIA’S SNAPDEAL SAID IT HAD DECIDED TO REMAIN INDEPENDENT AND WAS ENDING ALL TALKS REGARDING A SALE, BRINGING THE CURTAIN DOWN ON MONTHS OF DISCUSSIONS AROUND A POSSIBLE ACQUISITION OF THE E-COMMERCE fiRM BY BIGGER RIVAL FLIPKART.

THE BOARD OF JASPER INFOTECH, WHICH RUNS SNAPDEAL, HAD INPRINCIPLE AGREED TO FLIPKART’S REVISED BUYOUT BID OF UP TO $950 MILLION AND A DEAL WAS PENDING APPROVAL OF SMALLER SHAREHOLDERS, REUTERS REPORTED LAST WEEK. BUT OBSTACLES REMAINED WITH SOURCES SAYING FOUNDERS KUNAL BAHL AND ROHIT BANSAL WERE MULLING AN ALTERNATE PATH. “THE COMPANY HAS NOW DECIDED TO PURSUE AN INDEPENDENT PATH AND IS TERMINATING ALL STRATEGIC DISCUSSIONS AS A RESULT,” SNAPDEAL SAID IN A STATEMENT ON MONDAY.

THE FAILURE TO FORGE A DEAL IS A SETBACK FOR SOFTBANK GROUP, THE LARGEST INVESTOR IN SNAPDEAL, AS THE JAPANESE fiRM HAS BEEN TRYING TO ENGINEER AN ALL-STOCK TRANSACTION FOR MONTHS, AS A MEANS TO SECURE A SIZEABLE STAKE IN FLIPKART, INDIA’S NO. 1 HOMEGROWN E-COMMERCE PLAYER.

REUTERS HAS PREVIOUSLY REPORTED THAT THE FOUNDERS’ BID TO KEEP SNAPDEAL INDEPENDENT IS LIKELY TO RESULT IN LAYOffS AT THE COMPANY, WHICH CURRENTLY EMPLOYS ABOUT 1,200 PEOPLE.

ONE OF THE SOURCES TOLD REUTERS THAT AFTER ASSET CARVE OUTS AND ANTICIPATED LAYOffS, THE COMPANY IS LIKELY TO BE LEFT WITH A WORKFORCE OF JUST 250 EMPLOYEES. — Reuters