The offer of $10-12 Bn valuation by Walmart has received cold shoulder from SoftBank, the sources added.
Citing sources aware of the developments, The Economic Times said that the United States retail behemoth has reached an agreement on buying the stakes of New York-based investment firm Tiger Global Management, South African media conglomerate Naspers, venture capital firm Accel and China's Tencent Holdings.
Co-founders Sachin Bansal and Binny Bansal are expected to sell a part of their stake. Currently, all the above shareholders together hold over 55% stake in Flipkart.
However, another source pointed out that Walmart will be close to 50% ownership with other investors' stake and it is unclear if SoftBank will continue its talks after such agreement. "In a deal like this, there are always ebbs and flows, but there is a time factor to consider as well", said the source, adding that the final contours of the transaction are still being worked on and could change on a short notice.
Is eBay The Obstacle In Flipkart-Walmart Deal?
In what could be the most insignificant and freakish event to have been witnessed, the two companies only revealed that the Zenfone Max Pro will be launched on April 23rd in India, as part of a global launch.
Flipkart reported a loss of $1.4 billion against $3 billion revenues previous year, and this fact can be used by Walmart to make a better deal with eBay. Walmart also gets to grab a foothold in India's booming e-commerce industry. Therefore, Walmart will first have to settle this agreement with eBay. As such, the partnership between Walmart and Flipkart already seems like a match made in heaven. India's leading etailer, besides, has been looking to open retail stores in India for a long time now but has been waiting for the right investment partner.
Flipkart, Tencent, Tiger Global, Naspers and Amazon didn't respond to queries.
Also, beyond buying shares from existing investors, Walmart is also expected to infuse fresh funds in Flipkart, which may end up expanding the deal size to $10-12 Bn, from now reported $7 Bn. Despite selling shares worth over $500-600 million a year ago, its remaining stake of around 20 per cent is estimated to be worth around $4 billion now. Recode reports that even if Walmart takes a controlling stake in Flipkart, it may not be able to take over the actual merchandise deals with Flipkart.