Snapdeal approves Flipkart's $900-950 million buyout offer: Sources

Snapdeal board has approved Flipkart's USD 900-950 million buyout offer, sources told CNBC-TV18. The deal now requires Snapdeal shareholder's approval.

On July 17, Flipkart has made a revised offer to Snapdeal, which did not include its subsidiaries like FreeCharge, Vulcan Express and Unicommerce.

Infibeam is not likely to be part of the deal, as per the sources.

Snapdeal and Flipkart board are expected to meet this week to sign the Term Sheet and finalise the deal.

The deal is expected to be done in three parts. SoftBank will first buyout stake from Snapdeal and its investors — Nexus and Kalaari Capital. The capital will then be put into Flipkart by SoftBank. In the last stage, Flipkart will merge with Snapdeal.

The swap ratio of the deal is likely to be finalised by Flipkart in its board meeting on Friday. The deal is expected to be completed within 3 months from signing of Term Sheet.

SoftBank is likely to hold 20 percent in the combined entity. Flipkart will retain Snapdeal’s brand name in the initial stages.

FreeCharge sale is also likely to be completed soon.

The merger between the two companies had been delayed due to disagreements over acquisition of subsidiaries.

Earlier this month, Moneycontrol had reported that Flipkart had offered a term sheet to Snapdeal for an all stock acquisition for a valuation of USD 550 million which the latter rejected.

Snapdeal has been mulling a Plan B in case the deal with Flipkart does not go through. Snapdeal founders Kunal Bahl and Rohit Bansal have been conducting one-on-one meetings with senior executives including heads of multiple business units to firm up their plans for an alternative path, Moneycontrol had reported.