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Snapdeal rejects Flipkart’s takeover offer

RBR Staff Writer Published 06 July 2017

Indian e-commerce company Snapdeal has rejected an estimated $800-900m takeover offer from rival e-retailer Flipkart.

According to several media reports in India, the proposal was rejected on the grounds of the offered price being too low.

The deal could still take shape if Flipkart can come up with a revised offer to the Snapdeal shareholders although the exclusivity period to make an offer ended on July 2, as reported by the Indian Express.

Snapdeal has been reported to be looking at a valuation of nearly $1bn and is hoping that Flipkart reconsiders its offer.

Negotiations are likely to go on regarding the acquisition which pertains to only the online marketplace of the Jasper Infotech-owned Snapdeal. The offer by Flipkart excludes the company’s logistics business Vulcan and payments business Freecharge.

Snapdeal is also reportedly readying alternative moves to raise capital which could be through the sale of Vulcan and Freecharge besides opening doors for other potential buyers.

It has also been reported that smaller stakeholders in the company are not happy over Snapdeal’s divestiture plans which includes PremjiInvest, the investment arm of Wipro chairman Azim Premji.

SoftBank, the largest investor in Snapdeal has been actively pursuing the merger deal with Flipkart. The Japanese firm is likely to inject a $1.5-2bn investment in Flipkart if the proposed deal with Snapdeal is completed as per a report in the Economic Times.

Recently, Flipkart’s valuation had gone up to $11.6bn following a $1.4bn investment in April which came from Tencent, eBay and Microsoft. Flipkart had also agreed to take over eBay India following its deal with the American e-commerce company.


Image: Flipkart headquarters in Bengaluru, India. Photo: courtesy of Jyoti Atma/Wikipedia.org.