Flipkart’s early backer, New York-based Tiger Global Management and Japan’s SoftBank Corp, which hold 20% each in Flipkart, are expected to sell a big part of their stake to help give the Bentonville-based giant a large majority stake in the company.
Most other shareholders too are expected to toe the same line, except for the ten-year-old company’s co-founder and current executive chairman Sachin Bansal and the Chinese internet giant Tencent. While Bansal holds 5.5% stake in Singapore-registered Flipkart, Tencent holds about 7%.
Tencent and Walmart are both shareholders in Chinese online retail company JD.com.
“While Wal-Mart has offered to buy the entire stake held by all these shareholders, it is not final if all of them will agree to sell their entire stakes,” says the report. The deal should be signed off next week and will probably take at least another 3 months to close the deal.
The deal, if successful, will value Flipkart at around $18-20 billion and the stake sale by existing shareholders will happen at a discount to this, final negotiations for which are still being worked out. But Wal-Mart will improve the price from the $10-12 billion it was offering for secondary share purchases earlier.