Exactly a week back we reported that Snapdeal is on verge of getting acquired by Flipkart. Today, this plausible acquisition got an update that SoftBank, the largest shareholder in Snapdeal, held boardroom discussions on the proposed sale of the online marketplace to rival Flipkart on Tuesday.
According to the proposed deal, shareholders will get 1 Flipkart share for every 10 Snapdeal shares they own. Besides Softbanks, Ratan Tata, Alibaba and Kalaari are also among shareholders of Snapdeal. Co-founders — Kunal Bansal and Rohit Bansal — together own 6.5% of the company shares.
Early investors in Snapdeal – Kalaari Capital and Nexus Venture Partners – which own about 8% and 10% respectively in Snapdeal have also asked for about $100 million each from the sale, the sources said. The proposed sale could see SoftBank, which holds a dominant 33% stake in Snapdeal, to pick up a 20% stake in Flipkart for about $1.5 billion, in the process buying out $500 million to $1 billion worth of Tiger Global’s holding in Flipkart,
The deal, if completed, will mark the biggest acquisition in Indian e-commerce and also redefine the outline of online retail market where America’s Amazon and China’s Alibaba are also prime contenders. Earlier in 2014 when Flipkart acquired of Myntra the deal became the biggest e-commerce acquisition in India.
“A final decision on the sale is yet to be taken,” the person said. The board meeting on Tuesday signals easing of tensions among Snapdeal’s early investors, Kalaari Capital and Nexus Venture Partners, and its largest backer Softbank, said the report by The Economics Times.
Snapdeal has raised around $1.56 billion in 11 Rounds from 21 Investors while Flipkart has raised around $4.15 billion from around 40 investors.