SoftBank Group Corp is in a boardroom battle with cab aggregator Ola co-founder Bhavish Aggarwal after the latter blocked the Japanese entity’s move to buy more shares in the Indian company, Mint reported, citing two people familiar with the development.
Citing people in know, the report said SoftBank is now in talks to anyway buy Ola shares from Tiger Global Management.
Ola chief executive Aggarwal blocked a proposed involving Tiger Global selling part of its stake to SoftBank in late 2017, according to the report. Tiger Global partner Lee Fixel resigned from Ola’s board after the deal was blocked, the report added.
Last year in May, Ola had rewritten the rules of engagement to restrict its investors, including SoftBank, from buying more company shares.
According to documents filed with the corporate affairs ministry, SoftBank and its affiliates will need the approval of Ola founders Aggarwal and Ankit Bhati as well as the company’s board to purchase additional shares from other stakeholders.
The report also said that an Ola spokesperson denied any transaction between SoftBank and Tiger Global was in the works. It also cited a partner at a law firm that it didn't name as saying that any such deal was unlikely given that SoftBank needed Aggarwal's approval to increase its stake.
Meanwhile, The Economic Times reported, citing two people aware of the development, that global e-commerce giant Amazon’s bid for a majority stake in Flipkart, valuing the Indian rival at $22-23 billion (Rs 1.47-1.53 trillion), is not high enough to cover the risks.
Citing a person aware of the development, the report said the Flipkart board is considering the Amazon bid, which does not cover the operating risk involved in pursuing such a transaction.
The bid may attract scrutiny from the Competition Commission of India and it poses the risk of Flipkart sharing competitive data during due diligence, according to the report.
SoftBank, the largest shareholder in Flipkart, has been keen on the company considering a bid by Amazon, the report added.
The other major Flipkart investors Tiger Global Management, Accel, Naspers and Tencent, which have representatives on the board of the company, are in favour of a deal with US-based retailer Walmart, the report said.
Walmart is in advanced stages of negotiation to acquire a significant stake in Flipkart at a valuation of $18-20 billion.