Alibaba Group Holding Ltd. is leading a bid to take department store chain Intime Retail Group Co. private for as much as $2.6 billion, as China’s largest online retailer deepens its integration with brick-and-mortar stores.
The deal strengthens Alibaba’s burgeoning foothold in physical retail as it seeks growth beyond a slowing online business. Control of Intime will also allow the e-commerce giant to explore ways to modernize a $4.5 trillion industry that hasn’t adapted well to online shopping.
Alibaba and Intime’s founder Shen Guojun will pay HK$10 apiece for the Intime shares they don’t already own, according to a statement to the Hong Kong stock exchange. The offer represents a 42 percent premium over the last closing price, and the maximum amount of cash required, including options, is about HK$19.8 billion ($2.55 billion). Intime’s stock surged 35 percent upon resuming trade Tuesday.
“Alibaba will be able to do more experiments with Intime in the retail sector,” said Ray Zhao, a Shenzhen-based analyst at Guotai Junan Securities Co. “Intime’s valuation is relatively low now so it would be a good time to buy.”
Alibaba and Intime have been building their relationship for years. Alibaba originally took a stake in the retailer in 2014 and Alibaba Chief Executive Officer Daniel Zhang became Intime’s chairman the next year. The partnership already gives Alibaba access to Intime’s inventory and allows its online customers to pick up orders from physical stores. Privatization will allow Intime to work more closely on integrating online and offline shopping with a separate group of shareholders.Read More...
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