Indian eCommerce company Flipkart has upped its takeover offer to around $950m (£730m) for competitor Snapdeal, improving the potential for a deal between the two parties.
According to Reuters, citing two sources familiar with the matter, the Snapdeal board are evaluating the offer – after rejecting an initial bid of between $800m and $850m – but there are still some other sticking points that are blocking a deal.
The revised offer was made for Unicommerce, Snapdeal’s marketplace and eCommerce solutions provider, but not for its logistics arm Vulcan Express and digital payments unit FreeCharge, though both could be sold separately. Japan’s SoftBank is Snapdeal’s biggest shareholder and is said to be keen on seeing it folded into Flipkart.
Flipkart has plans to absorb Snapdeal’s employees but has not made it clear on how many of its 1,500 staff it would take on, and this is one of the sticking points. In addition, the Snapdeal board is still weighing up the idea of a merger with listed eCommerce conglomerate Infibeam, though the odds of this are slim.
Earlier this year, Flipkart raised $1.4bn in funding from Tencent, eBay and Microsoft, raising its valuation to $11.6bn. In addition, the funding round saw Flipkart acquire eBay India in exchange for an equity stake.