Flipkart denies report of sale talks with Amazon

Talks between both firms were reportedly held to sell Flipkart for $8 billion, The Economic Times reports

Flipkart, India’s largest online marketplace, has strongly denied a newspaper report that said they had exploratory talks with Amazon in the last quarter of 2015 for possible sale. 

“The report is pure fiction and seems to have been constructed based on invisible “sources” that have highly imaginative minds and given to improbable flights of fancy. There have been no talks or discussions for potential sale. Flipkart continues to be the market leader in India and we are in this business for the long haul,” a Flipkart spokersperson told Business Standard in an email. 

Earlier on Wednesday morning, Sachin Bansal, Executive Chairman of Flipkart had put out this cryptic tweet.

Citing several sources in the investment community, The Economic Times reported on Wednesday that Amazon had made a preliminary offer of up to $8 billion to acquire Flipkart, almost half of its previous valuation of $15.2 billion. The newspaper said they have spoken to three sources who were top executives in venture capital and private equity firms.  

Meanwhile, another source informed that Amazon had offered a little over $5 billion for Flipkart’s e-commerce business and $3 billion was pegged for the company’s logistics business.

The talks between both the companies, reportedly held in the last quarter of 2015, went cold after the offer was perceived to be too low. The sources also told the newspaper that there was no reason to believe that a deal will be struck or that the talks were still ongoing between them. 

Valuation woes

The development comes at a time when Morgan Stanley has marked down its investment value in the online marketplace by $4 billion to $11 billion. 

Meanwhile, Flipkart is also currently in talks with Alibaba to raise $1 billion, but the Chinese e-commerce player was said to be investing at a lower valuation than $15 billion.