Key Flipkart investors agree to sell stake to Walmart

In India’s largest online retailer Flipkart, a number of key shareholders have agreed to sell their stakes in the Bengaluru-based company to Walmart but the biggest of them, SoftBank, is holding and looking out for a better price, said people aware of the development.

What’s at Stake :

Tiger Global,Naspers, Accel, Tencent and founders Sachin Bansal and Binny Bansa collectively hold more than 55% of Flipkart.

SoftBank, the biggest stakeholder with 20%, is seeking about $15-17 billion. Walmart is believed to have offered $10-12 billion valuation to buy the SoftBank shares.

According to the reports of ET, Flipkart founders, Sachin Bansal and Binny Bansal told that they may sell a part of their stake in the company. These six shareholders collectively hold more than 55% of Flipkart. SoftBank, the biggest stakeholder at 20%, is seeking a better price as mentioned above, through a secondary sale of shares.

Discussions with SoftBank Going on, It had invested $2.5 billion in Flipkart in August last year through its $100 billion Vision Fund, at the time the largest private investment in India’s consumer internet sector. SoftBank has remained relatively cold to overtures made by Walmart, which is believed to have offered a $10-12 billion valuation to purchase the shares held by the Tokyo-headquartered investor, said by the founders.

“Discussions with SoftBank are still ongoing. Most of the others have come aboard. In a deal like this, there are always ebbs and flows, but there is a time factor to consider as well,” said one of the founder.

The final figures of the transaction are still being worked on and could change at short notice, the sources said.

It is unclear if the Japanese strategic investor will continue talks if Walmart goes on to settle a deal with the rest of the shareholders, given that the exclusivity period ended a few weeks ago, one of the persons said. Walmart would be close to 50% ownership if it acquires the stakes of the investors it has reached an agreement with, the person pointed out.

Besides buying shares from existing investors, Walmart is also expected to infuse fresh capital into Flipkart, which may push the size of the deal to $10-12 billion.

eBay, which has a stake in Flipkart, had also not agreed to a deal with Walmart because of its commercial agreements with the Indian platform. This gives merchants who sell on Flipkart access to more than 150 million customers from eBay around the globe, said by digital news platform Recode.

As per the terms of Walmart’s proposed investment in Flipkart, which is anticipated to change the face of India’s consumer internet, technology and retail industries, the primary investment will value the Bengaluru-based company at about $20-22 billion, close to a 100% rise from the $10.2-billion valuation it got in April 2017, before it raised funds in a round led by Chinese internet giant Tencent, which then valued it at $14.2 billion.

Source : ETtech

 

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18-04-2018 01:45 am