Snapdeal acquisition by Flipkart looks inevitable but uncertainty around it still continues. After news of Snapdeal rejecting initial offer from Flipkart and Infibeam’s sudden interest in the company, Flipkart has now offered a revised buyout offer for $850 million.
According to media reports, Flipkart has offered to pay $650-700 million in stock immediately and remaining $150 million later on.
Unlike, earlier offer, now Flipkart’s offer includes Snapdeal’s marketplace business and its inventory management arm – Unicommerce. Importantly, it doesn’t include Freecharge and Vulcan Express.
Last week, Entrackr reported that Snapdeal had asked Flipkart to pay at least $900 million to acquire the Gurugram-based company.
Meanwhile, Snapdeal is still trying to sell the payment platform Freecharge and logistics unit Vulcan to others in separate deals. While Freecharge hold acquisition talks with Bank of Baroda, Axis Bank and Times internet, Vulcan Express engaged with TVS Logistics, Gati and PE firm Peepul Capital for a possible take-over.
Snapdeal may still include Vulcan as part of the Flipkart deal if it is unable to finalize a separate sale of the unit.
As per Mint report, if Snapdeal accepts Flipkart’s latest proposal, they will then negotiate a sale and purchase agreement (SPA), a contract that will bind the two companies to conclude the deal. Snapdeal will then call for a shareholders’ meeting to get the deal approved by all of them.
SoftBank, the Snapdeal’s largest investor, has been proactively mediating the sale for the past few months. The Japanese investor giant pushing for the merger since March this year. But, the transition has hit multiple hurdles as discord between board members hasn’t been ironed out.
If Snapdeal accepts the revised offer from Flipkart, it’s expected that it would take months to materialise. Some of Snapdeal’s minority investors such as PremjiInvest have objected favourable treatment to a few in the proposed acquisition by Tiger Global backed company.