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, Flipkart 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.
SoftBank, Snapdeal’s largest investor, has been proactively mediating the sale for the past few months. The board also has representation from Snapdeal founders (Kunal Bahl and Rohit Bansal), NVP and Kalaari Capital.
EY, which was roped in by Flipkart to conduct a due diligence on Snapdeal, submitted its report a few days ago, following which the offer was made.
The deal between Snapdeal 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, Snapdeal 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.