The Board of the troubled home grown e-commerce giant Snapdeal will send details of the buyout proposal received from rival Flipkart to all its shareholders, seeking their comments, The Hindu has learnt.
Snapdeal counts Ratan Tata, PremjiInvest, Ontario Teachers’ Pension Plan, Foxconn, Temasek and BlackRock among its many investors.
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“The deal is almost through but the Board wants to seek views and comments from shareholders,” a person aware of the development said. The person added that the move was aimed at building consensus among all investors as sought by Flipkart. “Also, the Board is not unanimous in its opinion, so all the investors will be asked for feedback,” another source said, adding that co-founders Kunal Bahl and Rohit Bansal were resisting the takeover bid.
Earlier bid rejected
Flipkart, it is learnt, offered between $900 million-$950 million for Snapdeal, after its earlier bid of $800 million-$850 million was rejected on grounds that it under-valued Snapdeal. The source said Snapdeal was reaching out to shareholders, who would be given a week to respond.
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Once the comments and feedback from the investors are received, the Board will consider the buyout proposal for approval.
Snapdeal was not reachable for comments. However, the company’s board is expected to meet next week.
Recently, PremjiInvest, which is the personal investment arm of Wipro Chairman Azim Premji, had also written to Snapdeal seeking greater clarity on the terms of the deal. PremjiInvest had also questioned how the rights of minority shareholders will be protected.
The merger, if complete, will be one of the biggest acquisitions in the Indian e-commerce space. The deal has been in the works for about five months, however, the negotiations have been moving at a very slow pace.
Up till now, the discussions of the buyout deal were being held between shareholders who were also Board members -- SoftBank, Nexus Venture Partners, Kalaari Capital and the two co-founders.