MUMBAI (Reuters) – Walmart Inc stated on Saturday in a submitting with a U.S. regulator that it may take India’s Flipkart public in as early as four years, detailing for the primary time a possible itemizing timeline for Walmart’s largest-ever acquisition.
Minority traders holding 60 p.c of Flipkart’s shares “acting together, may require Flipkart to effect an initial public offering” (IPO) four years after the shut of the Walmart-Flipkart transaction, the Bentonville, Arkansas-based retailer stated in a May 11 submitting with the U.S. Securities and Exchange Commission.
The IPO ought to be achieved at no much less a valuation than that at which Walmart invested in the Indian e-commerce agency, the submitting stated. Walmart introduced earlier this week that it’ll pay $16 billion for a roughly 77 p.c stake in Flipkart in what’s the U.S. retail large’s largest-ever deal and a transfer to tackle arch rival Amazon.com Inc in a key progress market.
The funding implies a valuation of practically $21 billion for Bengaluru-headquartered Flipkart.
Minority shareholders after the deal embrace co-founder Binny Bansal, China’s Tencent Holdings, U.S. hedge fund Tiger Global Management and Microsoft Corp.
The deal now awaits clearance from India’s anti-trust regulator and is anticipated to shut later this 12 months.
As a part of the deal, Walmart will initially appoint 5 administrators to Flipkart’s board, two administrators can be named by minority shareholders whereas Bansal will take one board seat, in response to the submitting.
Walmart stated it may, in future, appoint a sixth board member with the approval of the vast majority of the Flipkart administrators.
It additionally stated it may appoint or exchange Flipkart’s chief govt and different key executives of group firms in session with Bansal and the board.
Walmart or its items may ask Flipkart to challenge new strange shares of as much as $three billion earlier than the shut of the “transactions and on or before the first anniversary of the closing”, it stated.
Reuters beforehand reported that Google-parent Alphabet was in talks to take a position about $three billion for a roughly 15 p.c stake in Flipkart.
That deal might be sealed earlier than the shut of the Walmart-Flipkart transaction or instantly after, a supply informed Reuters, declining to be named as the talks are personal.
Walmart additionally stated no social gathering could be liable to pay a termination price if a share issuance or buy settlement with Flipkart have been terminated.
The Economic Times newspaper reported on Friday, citing unnamed sources, that Japan’s SoftBank Group, which owns a roughly 20 p.c stake in Flipkart, was rethinking its exit because of tax liabilities and since it noticed additional worth in Flipkart.
SoftBank Chief Executive Masayoshi Son has stated that their funding in Flipkart had grown to nearly $four billion. That progress got here simply 9 months after SoftBank used its Vision Fund to take a position about $2.5 billion in Flipkart.
A spokeswoman for SoftBank in India declined remark.
Former Amazon staff Sachin and Binny Bansal based Flipkart in 2007 and, similar to Amazon, started by promoting books.
Reporting by Sankalp Phartiyal; Editing by Christian Schmollinger