The Board wants to get the shareholders’ opinion on the proposed deal, two people aware of the developments told PTI.
According to a PTI report: The company will share details of the buyout offer with all shareholders, which includes the likes of industrialist Ratan Tata and PremjiInvest.
They did not want to be identified as discussions are still on and the deal has not been finalised yet.
When contacted, a Snapdeal spokesperson told PTI: “No formal communication has been shared with shareholders and no board vote has happened on a proposed deal”.
He, however, did not comment on the timeline for sending out the proposal to shareholders.
An official at Ratan Tata’s office also confirmed that they have not received any communication yet on the proposal. He did not want to be named as he is not authorised to speak on the matter.
The statement assumes significance as some reports had said that Ratan Tata has already approved the deal.
Snapdeal’s largest investor — Japanese conglomerate SoftBank — has been proactively mediating the sale for the past few months.
Snapdeal has a number of investors, including Ontario Teachers Pension Plan, PremjiInvest, Ratan Tata, Foxconn, Temasek and BlackRock.
Interestingly, PremjiInvest — the personal investment arm of Wipro Chairman Azim Premji — has already written to Snapdeal seeking greater clarity on the deal terms.
It has also called for equal treatment of shareholders for payouts from the deal.
Reportedly, early investors Nexus Venture Partners (NVP) and Kalaari — who also have Board representation — could receive payouts worth over US $150 million once the deal with Flipkart is closed.
The Snapdeal Board is also expected to meet later this week.
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 e-commerce market, Snapdeal has seen its fortunes failing amid strong competition from Amazon and Flipkart.
Compared to a valuation of about US $6.5 billion in February 2016, the sale to Flipkart could see Snapdeal being valued at about US $1 billion.