The ongoing negotiation for the sale of Snapdeal
to its larger Indian e-commerce rival Flipkart
has let loose a barrage of reports in the media as well as a lot of speculation. Tech in Asia
reached out to a source with first-hand knowledge of the negotiations to figure out what is real and what’s not at this point in time. Here’s what we learned.
Status of sale
Snapdeal’s last board meeting on Tuesday was less contentious than earlier ones and took a definite direction towards a merger of Snapdeal
The deal will be done in the next four to six weeks if discussions continue to make progress, but the shareholders have not agreed on the terms yet. “There can be many a slip between cup and lip,” said the source.
Players at the table
is the largest stakeholder in Snapdeal
— it invested around $900 million for 33 per cent of the company. Early investors Kalaari
Capital and Nexus
Venture Partners, holding eight per cent and 10 per cent of equity, respectively, are on the board, as are the founders Kunal Bahl
and Rohit Bansal, who hold about 6.5 per cent.
Bone of contention
The main bone of contention is the valuation at which Flipkart
will acquire Snapdeal
in an all-stock deal.
Snapdeal’s valuation was over $6 billion at its peak early last year. Investors and analysts have devalued it since then as its position in the market weakened. The best-case scenario for it now could be a sell-off at a valuation of $1 billion — but the early investors and the founders are negotiating to sweeten the deal.
The article was published on Tech In Asia. You can read the article here