Like Twinkle Khanna once wrote in a leading daily, “I have a feeling that Ketu is traveling through Snapdeal’s astrological chart.” Many an offended Indian uninstalled Snapdeal after the Snapchat CEO had purportedly blurted that his ware was not for poor countries like the one we live in. Too much confusion about that ‘Snap’ part.
Snapdeal just cannot seem to catch a break. A helpless Kunal Bahl in all humility tweeted back to Ms Khanna, “More than a few people have told me "apni nazar utarwao" in the last one week.”
Fast forward two months after that unfortunate suffix triggered anger against an unsuspecting Snapdeal, the ecommerce company is still weathering gloomy days. News broke last night that Snapdeal had been offered a buyout from Flipkart for around 850 million dollars. It’s one eighth Snapdeal’s peak value.
(According to news wire PTI reports) Snapdeal's board is believed to have rejected a takeover offer of 800-850 million dollars (around rupees 5,500 crore) from larger ecommerce rival Flipkart. According to sources privy to the development, Flipkart has completed the due diligence process and has made an offer of 800-850 million dollars to buy Snapdeal. However, the offer was rejected by the Snapdeal's board which felt the amount undervalues the company as the due diligence report is clean.
"The first offer has been rejected but talks are still on. It is an ongoing discussion," said one of the sources. When contacted, Snapdeal, SoftBank and Flipkart declined to comment.
SoftBank, the Snapdeal's largest investor, has been proactively mediating the sale for the past few months. The board also has representation from Snapdeal founders (Kunal Bahl and Rohit Bansal), NVP and Kalaari Capital.
Sources said Ernst & Young, which was roped in by Flipkart to conduct a due diligence on Snapdeal, submitted its report a few days ago, following which the offer was made.
The deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the Indian e-commerce space.
One of the leading contenders in the Indian ecommerce space, Snapdeal has seen its fortunes failing amid strong competition from Amazon and Flipkart.
Compared to a valuation of about 6.5 billion dollars in February 2016, the sale to Flipkart could see Snapdeal being valued at about 1 billion dollars.
SoftBank has already written off over 1 billion dollars on valuation of its investment in Snapdeal.
Ketu is too fond of Snapdeal. Time for Bahl to seriously consider those wise people who advised him about all that “nazar”.