Flipkart is likely to make a modified offer in a couple of days for purchasing Snapdeal. Flipkart made the decision after its initial offer of USD 850 Million was discarded by the Panel of the smaller competitor.
The new proposal is expected to be near to USD 1 Billion mark, which was the original asking cost for acquirement of under pressure e-commerce company, sources having a deep knowledge of this matter said to the media. They wished to remain unidentified as deliberations are still going on and the contract has not been yet signed.
They further added that if the conditions are agreed, the contract will be finished within a time frame of 1 Month or so. When an effort was made to contact, SoftBank, Snapdeal, and Flipkart refused to comment. Snapdeal’s panel has already discarded a takeover proposal of USD 800 Million to USD 850 Million (almost Rs 5,500 Crore) from Flipkart as it thought that the figure underrated the firm keeping into consideration that the due diligence report was spotless.
Largest investor of Snapdeal, SoftBank, has been proactively intervening the tirade for the last couple of months. The Panel of Snapdeal also has depiction from its founders (Rohit Bansal and Kunal Bahl), Kalaari Capital, and Nexus Venture Partners. Snapdeal is also busy in individual deliberations for trading its mobile wallet company, Freecharge, and it logistics arm, Vulcan Express.
These contracts are also expected to be finished over the period of coming few months. The agreement between Flipkart and Snapdeal, if done, would mark the largest acquirement in the history of Indian e-commerce market. One of the biggest competitors in the Indian e-tailing industry, Snapdeal has witnessed its chances failing in the middle of sturdy opposition from Flipkart and Amazon.
Valuations of Snapdeal have also witnessed a sharp inclination in February 2016 from almost USD 6.5 Billion. SoftBank has already given up for lost of more than USD 1 Billion on valuation of its speculation in Snapdeal.
Let us see as to which new deal Flipkart will come up with to gain Snapdeal in a bid to conquer the market.