Alibaba, Intime founder offer US$2.55bn to take retailer private
E-commerce giant continues its push to transform into a clicks & mortar model as Shen Guo Jun's store and mall giant struggles with digital disruption
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.