Online retailer Snapdeal's Freecharge has been up for sale for a while now and competitor Amazon is said to have made a bid to acquire the digital payments platform. If the deal goes through, Amazon is likely to merge Freecharge with its own payments platform Amazon Pay.
Amazon's bid is said to be in the range of Rs 500 crore ($70-$80 million) and a term sheet has been signed by the Seattle-based company as well as Jasper Infotech that owns and operates the platform, reported The Economic Times. While Jasper Infotech did not respond to ET's queries on the sale of Freecharge and the term sheet, an Amazon spokesperson said: "We don't comment on rumours and speculations."
With Amazon stepping into the picture, it looks like Axis Bank has some competition when it comes to acquiring Freecharge. India's third-largest private sector bank was said to be leading the race to acquire the digital payments platform and was even said to be conducting due diligence.
While neither of the parties had commented on the reported acquisition talks, sources had revealed to the daily that the deal could be worth $100 million. Due to this, it is being said that Axis Bank might still be the frontrunner to buy Freecharge, despite Amazon joining the race.
It was earlier reported that two private banks -- one of them being Bank of Baroda -- and a few other private equity firms had expressed an interest in acquiring Freecharge. Additionally, Paytm is also said to have made a bid of $10-15 million for the platform, but it now looks like Axis Bank could soon take Freecharge off the market.
Freecharge, which was popular with users and racked up about 12 million transactions in April 2017, has taken a hit from the bleeding state of online marketplace Snapdeal. The online marketplace itself is in talks with Flipkart for a buyout. Snapdeal's board members rejected Flipkart's $700-$800 million buyout bid on July 4, after which the latter made a new offer of about $900-$950 million. The new proposal is now being evaluated and discussed by the board of Snapdeal.
It was also reported last week that Snapdeal may even merge with Infibeam, the only e-commerce company in the country to be listed on the stock exchange. Infibeam had even charted a term sheet with the basic conditions under which an investment would be made and it was likely to value Snapdeal at $1 billion. The firm based in Ahmedabad, Gujarat, has a market cap of about Rs 6,100 and if the merger with Snapdeal materialises, the duo will create a $2 billion e-commerce giant.
While Snapdeal chose to remain tight-lipped about the proposed merger, Infibeam came ahead and denied that it had made any bid for the online marketplace. "No, we haven't made any offer to Snapdeal," Infibeam founder and MD Vishal Mehta told the ET.