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Flipkart, Snapdeal duel over $150-200 million valuation gap

Deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the India

Press Trust of India  |  New Delhi 


After Snapdeal's board reportedly rejected Flipkart's $850 million takeover offer, the two parties are now holding parleys over the $150-200 million valuation gap.

According to sources privy to the development, had initially offered $1 billion for the deal but post the due diligence, it made an offer for $800-850 million.

The offer was rejected by Snapdeal's board as it felt the amount undervalues the company as the due diligence report is clean, one of the sources said.

"However, the deal isn't off and negotiations will continue. The differences over Snapdeal's valuation could delay the process," they added.

Emails sent to Snapdeal, SoftBank and did not elicit response.

SoftBank, Snapdeal's largest investor, has been proactively mediating the sale for the past few months. The board also has representation from founders (and Rohit Bansal), NVP and Kalaari Capital.

EY, which was roped in by to conduct a due diligence on Snapdeal, submitted its report a few days ago, following which the offer was made.

The deal between 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, has seen its fortunes falling amid strong competition from Amazon and Flipkart.

Compared to a valuation of about $6.5 billion in February 2016, the sale to Flipkart could see Snapdeal being valued at a much lower level.

SoftBank has already written off over $1 billion on valuation of its investment in Snapdeal.

The deal has been in works for a few months now. SoftBank saw initial hiccups in bringing early investors -- Nexus Venture Partners and Kalaari Capital -- on board with the sale proposal. However, these firms later agreed to the proposal.

But, PremjiInvest -- an investor in Snapdeal that does not have board representation -- has recently written to the company seeking greater clarity on the terms and sought equal treatment of shareholders for payouts from the deal.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, July 05 2017. 19:06 IST