According to a latest report in MoneyControl, the much awaited Flipkart-Snapdeal merger deal might have hit a roadblock for the second time. The report revealed that since last one week Snapdeal founders Kunal Bahl and Rohit Bansal have been holding one-on-one meetings with senior executives including heads of multiple business units to chalk out the company's plan for an alternative path if the Flipkart talks fall through.
The troubled e-commerce player received a total of two offers from the Indian ecommerce leader Flipkart for an all-stake acquisition in July. Snapdeal rejected Flipkart's initial $850 million buyout offer as Snapdeal’s board felt that the offer made by the ecommerce leader undervalued their company. But, now it seems the board is not happy with Flipkart's second offer of around $900 million-$950 million as well that came around last week as they think it is still below their expectation of $1 billion.
The MoneyControl report also revealed that it is not a negotiation on just the financials of the deal anymore, Snapdeal isn't happy with the term sheet furnished by Flipkart as well as they think it is laced with a lot of 'hold backs' and 'clauses.'
According to the report, a source close to Snapdeal has informed them that the the company is currently holding meetings on planning on how well can they execute Plan B for the flailing ecommerce company.
The merger, which is being deemed as India’s biggest consolidation in the e-commerce sector till date, is taking a long time to materialise as initially Snapdeal’s early-stage investor Nexus Venture Partners (NVP) was not happy with the payout being offered by the Tokyo-headquartered telecom and internet giant SoftBank. Snapdeal’s founders, Kunal Bahl and Rohit Bansal, along with a couple of other small and mid-sized investors, will exit Snapdeal as well. According to rumours going around in the market even Tiger Global is looking for a partial exit from Flipkart.
The merged entity was expected to give a major push to the current cut throat competition brewing between Jeff Bezos' Amazon and India's very own homegrown e-commerce leader, Flipkart. Reportedly, Bezos' has recently decided to spend a whopping amount of $5 billion in India to gain significant share as the e-commerce market surges in the Indian subcontinent. The company is working hard to get a larger share of the $30 billion Indian e-commerce market.
Snapdeal currently also have a merger offer from Ahmedabad-based Indian internet and e-commerce conglomerate, Infibeam on the table. Though Infibeam founder and MD Vishal Mehta has denied that any offer has been made but as we know there's no smoke without fire. Reportedly, Infibeam has even furnished a term sheet, which has valued Snapdeal at USD 1billion, which was the initial asking price asked for the e-commerce marketplace.
According to a source close to Snapdeal, the ecommerce founders are currently leaning more towards the Infibeam merger offer as not only is the price good but they will also get to retain their positions even post the acquisition which is something Flipkart isn't open to negotiating.
The troubled e-commerce player received a total of two offers from the Indian ecommerce leader Flipkart for an all-stake acquisition in July. Snapdeal rejected Flipkart's initial $850 million buyout offer as Snapdeal’s board felt that the offer made by the ecommerce leader undervalued their company. But, now it seems the board is not happy with Flipkart's second offer of around $900 million-$950 million as well that came around last week as they think it is still below their expectation of $1 billion.
The MoneyControl report also revealed that it is not a negotiation on just the financials of the deal anymore, Snapdeal isn't happy with the term sheet furnished by Flipkart as well as they think it is laced with a lot of 'hold backs' and 'clauses.'
According to the report, a source close to Snapdeal has informed them that the the company is currently holding meetings on planning on how well can they execute Plan B for the flailing ecommerce company.
The merger, which is being deemed as India’s biggest consolidation in the e-commerce sector till date, is taking a long time to materialise as initially Snapdeal’s early-stage investor Nexus Venture Partners (NVP) was not happy with the payout being offered by the Tokyo-headquartered telecom and internet giant SoftBank. Snapdeal’s founders, Kunal Bahl and Rohit Bansal, along with a couple of other small and mid-sized investors, will exit Snapdeal as well. According to rumours going around in the market even Tiger Global is looking for a partial exit from Flipkart.
The merged entity was expected to give a major push to the current cut throat competition brewing between Jeff Bezos' Amazon and India's very own homegrown e-commerce leader, Flipkart. Reportedly, Bezos' has recently decided to spend a whopping amount of $5 billion in India to gain significant share as the e-commerce market surges in the Indian subcontinent. The company is working hard to get a larger share of the $30 billion Indian e-commerce market.
Snapdeal currently also have a merger offer from Ahmedabad-based Indian internet and e-commerce conglomerate, Infibeam on the table. Though Infibeam founder and MD Vishal Mehta has denied that any offer has been made but as we know there's no smoke without fire. Reportedly, Infibeam has even furnished a term sheet, which has valued Snapdeal at USD 1billion, which was the initial asking price asked for the e-commerce marketplace.
According to a source close to Snapdeal, the ecommerce founders are currently leaning more towards the Infibeam merger offer as not only is the price good but they will also get to retain their positions even post the acquisition which is something Flipkart isn't open to negotiating.
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