Snapdeal`s founders are opposed to the Indian e-commerce firm`s acquisition by bigger rival Flipkart and would instead prefer to independently run a smaller version of the online marketplace, sources told Reuters on Monday.
The board of Jasper Infotech, which runs Snapdeal, had in-principle agreed to Flipkart`s revised buyout bid of up to $950 million and a deal was pending approval of smaller shareholders, Reuters reported last week.
However, Snapdeal founders Kunal Bahl and Rohit Bansal still do not want to sell Snapdeal to Flipkart, and would rather run a stripped-down version of the online marketplace with funds from the sale of the firm`s payments arm FreeCharge and its logistics unit Vulcan Express, two sources said on Monday.
The sources asked not to be named as the talks were private.
A third source said two early stage investors in Snapdeal, Kalaari Capital and Nexus Venture Partners, were also reluctant to back a deal with Flipkart.
The failure to forge a merger would be a setback to Softbank Group, the largest investor in Snapdeal, as it has been attempting to engineer an all-stock deal for months, as a tie-up would help it secure a sizable stake in Flipkart, India`s No. 1 home-grown e-commerce player.
The likelihood of a Snapdeal-Flipkart deal is fast fading as SoftBank is losing patience given it has been dragging on even after over six months of negotiations, one of the sources said.
Another source said chances of a Flipkart-Snapdeal merger were very slim as investors fear Bahl and Bansal could create legal hurdles to further stymie the deal.
Last week, Indian lender Axis Bank said it was buying FreeCharge for $60 million.
Bahl and Bansal`s bid to keep Snapdeal independent is likely to result in layoffs at the firm, which currently employs fewer than 1,500 people. About 90 percent of the staff will have no place in Bahl and Bansal`s new plans, one of the sources said.
Snapdeal, Flipkart, Nexus and Kalaari were not immediately reachable for comment while SoftBank declined comment.
J Sagar Associates, the law firm representing Jasper Infotech, declined to comment.