Snapdeal appears to have become a hornets’ nest. The beleaguered online marketplace, which is yet to be acquired by Flipkart, faces yet another hurdle in the process as minority stakeholder – Premji Invest, the personal investment arm of Wipro chairman Azim Premji, has objected over preferential treatment being given to particular stakeholders.
According to The Economic Times report, Premji Invest is asking how he rights of minority shareholders will be protected in the event of the sale being sealed. The investment firm is also trying to bring consensus among other minority stake holders in the Gurugram based company.
Singapore’s sovereign wealth fund Temasek and asset manager BlackRock, also to oppose special payouts to particular shareholders, says report. The payouts to be made to early backers – Nexus Partners, Kalaari Capital including Kunal Bahl and Rohit Bansal.
In the letter sent to the Snapdeals’ board, Premji Invest has outlined its concerns over the proposed transaction. This new concern by minority stakeholders is likely to delay the acquisition, which is currently in due-diligence phase.
Other minority stakeholders that own 15% equity in the company are also slated to join Premji invest to oppose special treatment to aforementioned entities. The entities are reported to get $150 million, which is likely to be borne by other shareholders. However, this could only be possible when they all concur to it.
This opposition from minority stakeholders will add more trouble for Softbank, which has been trying to expedite the Snapdeal acquisition. Yesterday, Entrackr reported that Flipkart is eyeing to pay not more than $400 million for Snapdeal marketplace. It’s also not considering to acquire Snapdeals’ logistics arm – Vulcan Express and Unicommerce eSolutions.
Earlier this week, Reserve Bank of India (RBI) had expressed its concerns over structure to protect the interest of Snapdeal shareholders. The regulator will make sure that the acquisition does not violate rules under the Foreign Exchange Management Act.
