Bengaluru, July 31 (IANS) Leading e-tailer Snapdeal on Monday said it was terminating strategic discussions to sell its stake, ostensibly to rival Flipkart, as it had decided to pursue an independent path.
“As we have been exploring strategic options over the months, we have decided to pursue an independent path and terminate all strategic discussions,” said the company’s spokesperson in a statement here, without any reference to Flipkart.
A company official, who did not want to be named, however, told IANS that the formal negotiations scheduled here between the two on Monday were called off at short notice.
Though Flipkart declined to confirm on its meeting with Snapdeal being cancelled, the latter’s official admitted that their representatives could not meet to take the abandoned “deal” forward.
“We have a compelling direction (Snapdeal 2.0) to create life-chang ing experiences for millions of buyers and sellers across the country,” said the Snapdeal statement.
After Flipkart offered to buy out the Gurgaon-based Snapdeal at its revised $900-950 million price, the latter’s board decided to seek the consent of its investors, including Ratan Tata and Premjiinvst of Wipro czar Azim Premji for exiting the e-tail business.
Other strategic and institutional investors in Snapdeal are Ontario Teachers’ Pension Plan, Foxconn, Temasek and BlackRock.
“With the sale of certain non-core assets, we expect to be financially self-sustainable. We look forward to the support of our community, including employees, sellers, buyers and other stakeholders in helping us create a designed-for-India commerce platform,” added Snapdeal.
Snapdeal has seen its fortunes dwindling in the face of stiff competition from Amazon and Flipkart.
In a related development, Snapdeal’s largest investor SoftBank said that supporting entrepreneurs and their vision was at the heart of its Founder and Chief Executive Masayoshi Son and its investment philosophy.
“As such, we respect the decision (of Snapdeal) to pursue an independent strategy. We look forward to the results of its 2.0 strategy and will remain invested in the vibrant Indian e-commerce space,” added Softbank in the statement from Tokyo.
SoftBank has written off $1 billion on valuation of its investment in Snapdeal.