After rejecting Flipkart‘s initial offer, the board of Snapdeal has reportedly asked for a $ 900 million payout for the proposed acquisition. Reports suggest Flipkart has not yet responded to the offer.

The Economic Times reported a new offer will likely be made by early next week, according to sources privy to the development. This new offer is close to the initial offer of $1 billion made by Flipkart before conducting an eight week long due diligence.

A Letter of Intent (LoI,) was first signed by Flipkart and Snapdeal for a possible merger in May 2017. Since then, the acquisition deal has faced many roadblocks. The merger had to initially get special permission from FEMA and RBI for possible transfer of Flipkart stock. Later, Azim Premji the Chairman of Wipro and the head of Premji Invest, his own personal investment arm, also sent a letter to the board of Snapdeal objecting to the special payouts for the founders and two larger investors. The board of Snapdeal is yet to receive approval from Premji Invests, Ratan Tata and other smaller shareholders who together own 40% of the Snapdeal stock. 

Japan based SoftBank, Snapdeal’s largest investor has been the mediator for the deal for the past two months. Founders Kunal Bahl and Rohit Bansal along with representation from majority shareholders Nexus Venture Partners and Kalaari Capital, together form the Snapdeal board.

Apart from talks with Flipkart, Snapdeal is also engaged in separate discussions to sell their mobile wallet operations arm FreeCharge and the logistics arm Vulcan Express. Axis Bank and GATI, among others, have shown interest in acquiring FreeCharge and Vulcan respectively.

SoftBank, which initially valued Snapdeal at $ 6.5 billion in 2016, cut its valuation by 85% to $ 1 billion for this merger. Post which Flipkart made an all stock acquisition offer of $ 800 – $ 850 million which valued Snapdeal at $550 million. Snapdeal rejected this offer saying it undervalued the ecommerce company given that the due diligence report was clean.

This merger, if completed, would mark the biggest acquisition in the ecommerce industry which could give tough competition to the global ecommerce giant Amazon. SoftBank, Snapdeal and Flipkart have declined to comment about this latest development.

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