Onilne retailer Alibaba has proposed a HK$19.8bn ($2.6bn) bid to privatise Intime Retail, in partnership with an entity owned by Intime founder Shen Guo Jun.
The bid involves cancellation of shares in Intime in exchange for a payment at HK$10 ($1.28) a share.
This represents a premium of approximately 53.59% over the average closing price of Intime shares over the last 60 days, and 42.25% over the closing price of HK$7.03 ($0.9) before the suspension of trading on 28 December last year.
China-based Intime operates 29 department stores and 17 shopping malls across the country.
Currently owning 28% of the equity interests in Intime, Alibaba made the initial investment in July 2014 and a conversion into equity of convertible debt securities last June.
Under the terms of the proposed transaction, Alibaba would hold the controlling share in Intime, and its share in the firm is expected to increase to approximately 74%.
Alibaba chief executive officer Daniel Zhang said: "Alibaba is working with offline retailers to transform conventional approach, create new consumer shopping experience and use actions to embrace future opportunities under the new retail model.
"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.”
The proposed transaction is a part of the online retailer's strategy to transform conventional retail through consumer reach, rich data and technology.
The bid is subject to customary closing conditions as well as approval from Intime’s independent shareholders and the sanction of the Cayman Islands court.
Image: Alibaba Group corporate campus in Hangzhou, China. Photo: courtesy of Alibaba Group.