After six months of discussions and negotiations, looks like Snapdeal is still stuck where it was at the start of the year.
According to the latest reports coming in from various quarters, Snapdeal’s proposed sale to Flipkart is in dire straits and could well be called off due to disagreement on the terms of the deal between founders and shareholders.
Citing people in the know of things, the Livemint report said that Snapdeal and Flipkart canceled a key meeting that had been scheduled to continue negotiations over the deal.
Apparently, the main reason behind the fall-out is the absence of backing from Snapdeal founders Kunal Bahl and Rohit Bansal. The duo still wants their brainchild to survive as an independent entity, howsoever small or pruned. Their efforts to keep the firm independent were boosted by the sale of its payments unit FreeCharge to Axis Bank Ltd last week for Rs385 crore in cash, the people said.
Besides, many other minority stakeholders in Snapdeal have objected to the special payout, estimated at about $90 million, to early investors Kalaari Capital and Nexus Venture Partners, as well the overall structure of the transaction.
Last week, there were reports that Snapdeal’s board has agreed to the Flipkart’s revised bid of up to $950 million. The two companies are expected to make an official announcement on the fate of the deal later in the day today. We will keep you posted as we get further updates on this.