Published By : 14 Jul 2017 | Published By : QYRESEARCH
Flipkart, the Indian retail giant, will be making a revised offer of around US$900-950 mn for the procurement of the troubled rival Snapdeal. The new offer is very close to the initial price of US$1 bn that was asked by Jasper Infotech for the deal. The new offer is expected to be made by the coming week, as told by the sources, not wanting to be named. Flipkart, Snapdeal, and Softbank, however, chose to remain tightlipped on this development.
The Jasper Infotech’s board has already turned down an offer of US$800-850 mn from Flipkart for the merger as it felt the offer made undervalued the retailer. SoftBank, the largest investor in Snapdeal, has been mediating the coalition proactively for the last few months. The board of Jasper Infotech also has a representation from the founders of Snapdeal, Rohit Bansal and Kunal Bahl, as well as Kalaari Capital and Nexus Venture Partners.
Snapdeal is also evaluating the sale prospects of Vulcan Express (logistics arm) and Freecharge (mobile wallet operations) and is expected to close these deals very soon. The deal between Flipkart and Snapdeal, if closed, would mark the biggest merger in the history of Indian e-commerce history.
Snapdeal, once a leading contender in the e-tailing sector in India, has seen its fortunes fading amidst a robust competition from Flipkart and Amazon. The valuation of Snapdeal was US$6.5 bn in February 2016 and has been declining ever since. SoftBank already wrote off more than US$1 bn on valuations of its investment in the e-retailer.