A month ago, we reported how the Flipkart-Snapdeal merger was finally happening with the only hurdle remaining a go-ahead from two of India’s most powerful businessmen magnets, Ratan Tata and Azim Premji. While back then it wasn't clear if these smaller investors in the company could act as a major road bump in the deal going through, but as it is turns out, PremjiInvest does have certain objections with the deal and has demanded a clarification on the same from Snapdeal.

According to a report by Economic Times, PremjiInvest, the family investment arm of Wipro Ltd chairman Azim Premji, has sent a letter to Snapdeal asking for clarity on how the rights of minority shareholders will be protected in the proposed deal. It is important to be noted that PremjiInvest has demanded the clarification for the second time since the deal negotiations have been going through.

The ET report further added that not only is PremjiInvest seeking a clarification from Snapdeal on the rights of minority shareholders, but it is also reaching out to all the other minor investors in Snapdeal such as asset management company BlackRock and Singapore state investment firm Temasek to come together in unison and oppose any special payments being made to certain shareholders, including co-founders Kunal Bahl and Rohit Bansal and early backers Kalaari Capital and Nexus Venture once the deal concludes.

The report further revealed that the special payment amount being contested by PremjiInvest is $150 million, which is likely to be borne by the rest of the shareholders. This is, however, only possible if all the stakeholders in the firm decide to agree with the terms.

Meanwhile, a Bloomberg report is stating that PremjiInvest is raising an objection to a proposed special payment of $90 million. This constitutes $60 million being given to Kalaari Capital and Nexus and $30 million being given to Snapdeal founders. However, PremjiInvest isn't against the proposed special payment package of $30 million to be given out to Snapdeal employees.

The merger, which is being deemed as India's biggest consolidation in the e-commerce sector, took a long time to materialise initially mainly because of Snapdeal’s early-stage investor Nexus Venture Partners (NVP) not being happy with the payout being offered by the Tokyo-headquartered telecom and internet giant SoftBank but the latter finally got everyone on board.

Snapdeal’s smaller group of investors include PremjiInvest, Tata Sons' Ratan Tata, China’s Alibaba, Canada’s Ontario Teachers’ Pension Plan and Taiwanese electronics maker Foxconn. They own about 40% of Snapdeal, but do not enjoy board representation.

Recently, Nikkei Asian Review brought to fore that SoftBank, which has been heading the merger, had reportedly reached a broad agreement with stakeholders on the deal. It also said that the Japanese Internet conglomerate is looking to own about 20% of the combined Flipkart-Snapdeal entity and launch a fierce battle with global e-commerce giant Amazon in India.

[Top Image: Inc42]

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