SoftBank wants Flipkart to wait for Amazon offer

New Delhi/Bengaluru: Flipkart’s largest shareholder SoftBank Group is making a final attempt to convince other key shareholders in India’s biggest online retailer to await an offer from Amazon before agreeing to a sale to Walmart Inc., three people familiar with the matter said.

Amazon has indicated to Flipkart’s board that its offer will be at least 10% higher than that of Walmart, the people said. But except for SoftBank, all the other key Flipkart shareholders are in favour of closing a deal with Walmart, the people said, requesting anonymity.

Walmart is close to buying more than 55% in Flipkart, they said, although the US retailer’s final stake could be higher, depending on what SoftBank decides.

Flipkart’s key investors, Tiger Global, Naspers and Accel Partners, all of which have representatives on the Flipkart board, are not convinced that a deal with Amazon is practical to pursue, the people said. They are worried that Amazon may decide to back out of a deal altogether. The three investors also believe that India’s antitrust regulator may not clear a merger between Flipkart and Amazon India, which control more than 80% of online retail here.

The clincher for Walmart could be that Tiger Global partner Lee Fixel, Flipkart’s most influential shareholder and board member, is pushing hard to complete the proposed deal with Walmart, the people said.

“SoftBank is the only one pushing for Amazon because as per the current terms offered by Walmart, they will barely make any money. Because Amazon has indicated it will offer 10-15% more than Walmart, SoftBank would prefer to wait,” one of the people said.

All the three people said that the deal with Walmart could be finalized next month if SoftBank signs off on it.

Flipkart and SoftBank didn’t respond to emails seeking comment.

SoftBank and Tiger Global are the two largest shareholders in Flipkart with a 20% stake each. Naspers is the third-largest investor in the company with an ownership of nearly 13%.