Flipkart may woo Snapdeal with revised bid after rejection of $800 mn offer

New offer to be closer to Snapdeal demand of $1 bn; deal to conclude in a month, if accepted

Online marketplace biggie Flipkart is all set to revise its bid to buy Snapdeal after the latter’s board of directors rejected the first offer of nearly $800 million.

The bid which might be sent in the next few days would be close to the Snapdeal board’s demand of a billion dollar, sources close to the board said. They added that if the terms are accepted, the deal would be completed within a month or so.

Snapdeal board members had earlier rejected the offer of $800 million made by Tiger Global-backed Flipkart, but sources said talks were still on. “The board is unhappy with Flipkart pegging the valuation nearly $200 million less, even though Snapdeal cleared the due diligence. The board is, however, hopeful Flipkart would reconsider the offer,” sources earlier said.

SoftBank, the Snapdeal’s largest investor, has been proactively mediating the sale for the past few months. 

The board also has representation from Snapdeal founders Kunal Bahl and Rohit Bansal, Nexus Venture Partners and Kalaari Capital.

Snapdeal is also engaged in separate discussions for selling FreeCharge (mobile wallet operations) and Vulcan Express (logistics arm).

These deals are also likely to be closed over the next few weeks.

The deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the Indian e-commerce space. One of the leading contenders in the Indian e-commerce space, Snapdeal has seen its fortunes failing amid strong competition from Amazon and Flipkart.

Snapdeal has seen its valuation plummeting from about $6.5 billion in February 2016. SoftBank has already written off over $1 billion on valuation of its investment in Snapdeal.