Alibaba Group and the founder of Intime Retail Group have jointly bid to take the Chinese department store operator private for HK$19.79 billion (US$2.55 billion), they said on Tuesday.
Alibaba Investment and Shen Guo Jun offered HK$10 per Intime share. That would represent 42.25% more than the stock’s last price of HK$7.03 on December 28 when trading was suspended pending an announcement. The shares surged 35% when trading resumed on Tuesday.
The Alibaba group currently holds 27.82% of Intime, while Shen owns 9.17%.
“We don’t divide the world into real or virtual economies, only the old and the new,” Alibaba Group Chief Executive Officer Daniel Zhang said in a separate statement. “Those who cling on to the old ways of retailing will be disrupted.”
“Our combination with Intime will enable us to tap into the long-term growth potential of a new form of retail in China powered by Internet technology and data,” Zhang said.
China’s US$4.5 trillion retail sector is growing at an annual clip of 10.7% Alibaba said. The e-commerce firm also said it was working with offline retailers to create a new shopping experience.
Intime operates 29 department stores and 17 shopping malls in China, mainly in so-called first- and second-tier cities. In August, it posted a 21.3% fall in first-half profit amid declining sales, saying e-commerce had transformed the competitive landscape.