Troubled e-commerce firm Snapdeal seems to have caught the interest of another buyer apart from Flipkart. According to a report in the Times of India, Ahmedabad-based Indian internet and e-commerce conglomerate, Infibeam is involved in serious merger talks with the currently on sale e-commerce site.
The report divulged that Infibeam, which is involved in online retailing, e-commerce software and internet services, has even furnished a term sheet, which is likely to value Snapdeal at USD 1billion. Notably, the $1 billion amount was the initial asking price for acquisition of troubled e-commerce marketplace. For the uninitiated, a term sheet is a legal non-binding agreement that carries terms and conditions under which a particular investment will be made.
The rumour comes on the line of recent developments where Snapdeal rejected Flipkart’s $850 million buyout offer as Snapdeal’s board felt that the offer made undervalued the company (Read Here). However, according to some sources, Flipkart isn’t ready to take no for an answer yet and has decided to give its rival company a new improved offer, which is likely to be close to USD 1 billion (Read Here).
Infibeam, which has a market capitalisation of around Rs 6,100 crore, aims to create a combined $2-billion entity if the merger talks with Snapdeal successfully goes through. According to the report, the merger will most likely not include Snapdeal’s payments platform Freecharge and logistics business Vulcan Express as Snapdeal is reportedly hunting different buyers for them. Recently, we reported how Indian global telecommunications services company, Airtel is looking to get its hand on online mobile wallet platform, FreeCharge (Read here).
According to experts, considering the fact that Infibeam focuses on business-to-business commerce and Snapdeal’s is a consumer-led online retail platform, their coming together will be a match made in heaven. However, the TOI source also clarified that Infibeam being interested in Snapdeal doesn’t mark the end of the road for Flipkart. The source said, both the players can cross-sell their products as their merchants are largely different.
As of now, Snapdeal has three opportunities in front of it- finalise a deal with Flipkart, merge with Infibeam or sell its assets such as Freecharge and Vulcan Express to have enough capital to stand on its own feet.