Home » Internet » Ecommerce » Flipkart’s Offer Of $1 Bn Has Been ‘Almost’ Accepted By Snapdeal; Founders Will Get $30 Mn Each
Last updated: May 12, 2017 at 13:35 pm

Flipkart’s Offer Of $1 Bn Has Been ‘Almost’ Accepted By Snapdeal; Founders Will Get $30 Mn Each

Flipkart's offer of $1 bn for Snapdeal almost accepted
Flipkart’s offer of $1 bn for Snapdeal almost accepted

The deck has been cleared, and the final move has been made.

Flipkart’s offer of $1 billion to acquire and merge Snapdeal has been ‘almost’ accepted by the investors and founders of Snapdeal, and the official merger would be announced most probably next week.

As per reports coming in, Softbank has agreed to infuse the much needed funds into the merged entity, which will enable a handsome payout of $30 million each for the founders of Snapdeal, and allow them to say ok for the merger.

Earlier, the founders of Snapdeal had received Rs 80 cr each, when they sold their stake to Ontario Teacher’s Pension Plan in 2015.

However, it is still not clear whether Kalaari Capital and Nexus Venture Partners, the two early investors in Snapdeal has given their acceptance or not.

SoftBank: The Tough Negotiator

Reportedly, Nexus will receive around $60 million in equity, instead of $100 million which they asked for the merger. For 11% stake, Nexus had invested between $43-45 million in Snapdeal.

But the reports indicate that Softbank, the majority stakeholder in Snapdeal has given its green signal to the deal of $1 billion in equity and $30 million each for the founders.

It seems SoftBank is a tough negotiator, and they somehow pulled this off.

Kabir Misra, managing partner at SoftBank Capital, and Alok Sama, president of SoftBank Group International have played a crucial role in finalizing this deal.

A non-binding Letter of Intent (LoI) would be signed next week between Jasper Infotech, the parent company of Snapdeal and Flipkart, for this mega-merger. Complete acquisition would take place in the next 3-4 months.

No Role for Snapdeal Founders?

One major pointer which has been revealed in the talks is the role of Founders Kunal Bahl and Rohit Bansal in the merged entity. As per reports received by us, both of these founders will have to give away all control and authority in the new merged entity, and they will have no role in the operations.

In fact, they will be selling off their 6.5% stake in Snapdeal which they currently hold, in exchange for $30 million payout which they would be receiving after the merger. In exchange for 6.5% stake in Snapdeal, the founders had reportedly asked for $80 million payout, which has been rejected by SoftBank. The reports indicate that SoftBank, which has lost Rs 9000 crore via their investments in Snapdeal and Ola, refused to give more to the founders.

A person familiar with the merger talks said, “Both founders will not be part of the merged entity in any capacity, post the acquisition of the company by Flipkart,”

We will keep you updated as we receive more information.

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