Snapdeal rejects Flipkart's offer of $850 million

05 Jul '17

1 min read

E-commerce company Snapdeal has rejected e-retail giant Flipkart's takeover offer amounting to $850 million (approximately Rs 5,500 crore). Flipkart made the offer to acquire Snapdeal for $800-850 million after the due diligence process, however, Snapdeal rejected as its board feels the offer undervalues the company which has a clean due diligence report.

Even though Snapdeal's board has rejected the offer, the discussion is still underway, said media reports quoting sources that are privy to the development.

Snapdeal's largest investor SoftBank is mediating the sale and the company's board has representation from founders Kunal Bahl and Rohit Bansal and investors Nexus Venture Partners (NVP) and Kalaari Capital.

Ernst & Young was roped in to prepare the due diligence report on Snapdeal and the offer was made after the agency submitted the report.

During the funding round in February 2016, Snapdeal was valued at $6.5 billion, which later reduced to $1 billion, according to market watchers.

Softbank, which owns 30 per cent stake in Snapdeal, suffered a loss of $1 billion on investments made in the e-commerce portal during 2016-17. NVP holds 10 per cent share in Snapdeal, while Kalaari has an 8 per cent stake in it. (KD)

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