SoftBank, which owns majority stake in Snapdeal, is all set to sell the struggling e-commerce platform to Flipkart. As per the latest report from Finanical Express, the Japan-based behemoth has already initiated the process and offered to buy out Snapdeal co-founders Kunal Bahl and Rohit Bansal’s stake.

As per the report, SoftBank has offered $50 million for the 6.5 per cent equity that Kunal and Rohit collectively own in Snapdeal. Both of them are expected to receive $25 million each for the sale of their shares.

Further, SoftBank has also started to acquire shares of other investors in the company, including Kalaari Capital and Nexus Venture Partners, and Bessemer Venture Partners. Notably, SoftBank owns around 33 percent in the company, while Kalaari and Nexus owns 8 percent and 11 percent, respectively.

While the company is not acknowledging the sale process, sources aware of the development have suggested that the negotiations are still going on. The debate is primarily upon the fate of around 2,500 employees that are currently working at Snapdeal.

Earlier, we reported that the sale will be a stock-deal and not a cash one. The ratio that is being discussed is around 1:10 — meaning stakeholders will receive one share of Flipkart for every 10 shares of Snapdeal. To convince other investors for the sale, SoftBank held a board meeting last week, which reportedly was four-hour long, but they all failed to reach a concrete decision for the fate of the company.

While SoftBank is all set for the sale of Snapdeal to Flipkart, other investors are opposing the proposal. Earlier, Kalaari Capital and Nexus Venture Partners were opposing SoftBank and even questioned SoftBank about its intention with regard to Snapdeal. Earlier, a report from ET suggested that the company’s early investors – Kalaari Capital and Nexus Venture Partners, are asking for about $100 million each from the sale.

The talks for Snapdeal’s sale were being conducted with both Flipkart and Alibaba-backed Paytm. However, the discussion is moving ahead with Flipkart as the valuation offered by Alibaba-backed Paytm was much lower than what Flipkart offered.

These sales talks however, are in stark contradiction to recent announcements made by the company to its employees, ensuring profits in the next couple of years. On Sunday, it yet again reassured  its employees through an internal email amid rumors of Flipkart takeover. However, in the email, they hinted that the firm’s fate was not in their hands.

Also, employees with stock options who had been hoping for a large payout from a listing now fear their options may be worthless if the company is sold. A source aware of the sale discussions said a deal with Flipkart is likely to get announced within a month.

As on March 31, 2016, Snapdeal had Rs. 1,072.2 crore as cash and bank balances, revealed through the filings with the registrar of companies (RoC). While not yet verified, the company is believed to be losing Rs. 50 crore every month — and is left with just Rs. 500 crore in the bank.

But why Flipkart is eager to acquire Snapdeal? Well, among various factors, one of them is SoftBank. As per the reports, SoftBank is going to buy out some portion of Tiger Global Management’s share in Flipkart. With SoftBank coming on-board, the cash woes for the homegrown e-commerce firm are likely to come to an end, and it will be better prepared for a fight against Amazon India.

We have emailed Snapdeal and SoftBank regarding this development and will update the story once we hear back.

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