Snapdeal, an India-based e-commerce company that counts corporates SoftBank, eBay, Alibaba, Foxconn, Intel and Myriad as investors, has turned down a nine-figure offer from counterpart Flipkart, according to several outlets.
Flipkart’s offer was sized between $550m, according to Moneycontrol, and $800m to $900m, according to the Economic Times, which cited people briefed on the matter. Livemint reported the amount as “roughly” $700m to $750m, citing three people familiar with the matter.
Bloomberg reports the Flipkart offer was sized at $850m, and that Flipkart is unlikely to pay more than $900m while Snapdeal, valued at $6.5bn to $7bn as of a $200m round in February 2016, is holding out for $1bn, according to people familiar with the matter.
Snapdeal runs an e-commerce marketplace with more than 60 million products offered by some 300,000 merchants, but it has struggled to make profits in the wake of competition not only from Flipkart but US-based Amazon, which has pledged to invest $5bn to expand in India.
Although the companies have not reached an agreement on a price for the deal, which according to Livemint will not include Snapdeal’s payment subsidiary, Freecharge, or its logistics unit, Vulcan, Flipkart has conducted due diligence and found no major issues.
However, Bloomberg reports that Flipkart wants all Snapdeal’s investors to agree on an acquisition, and some smaller backers without board seats are objecting to what they view as special payments to co-founders Kunal Bahl and Rohit Bansal, and early investors Kalaari Capital and Nexus Venture Partners.
SoftBank, which owns about 33% of Snapdeal, and Flipkart’s largest investor Tiger Global Management are reportedly playing prominent roles in negotiations, and the former is said to be in talks to buy Flipkart shares from Tiger Global as part of the deal.
Snapdeal has raised more than $1.7bn since it was founded in 2010, and its other backers include BlackRock, Temasek, PremjiInvest and Bessemer Venture Partners.