Alibaba leads $ 2.6b bid for In­time Re­tail Group

Global Times - - Bizoverview -

Alibaba Group Hold­ing is lead­ing a $ 2.6 bil­lion bid to pri­va­tize In­time Re­tail Group Co in a move to dig­i­tize brick- and- mor­tar de­part­ment stores while growth in on­line sales be­gins to slow.

Alibaba In­vest­ment and In­time founder Shen Guo­jun have of­fered HK$ 10 ($ 1.29) per In­time share ( 42.25 per­cent over the HK$ 7.03 price when trad­ing stopped on De­cem­ber 28 pend­ing an an­nounce­ment). The shares surged as much as 38 per­cent when trad­ing re­sumed on Tues­day to the high­est price since July 2015.

The of­fer comes as the gov­ern­ment works on a broad In­ter­net sec­tor strat­egy com­bin­ing on­line and off­line in­dus­tries, en­cour­ag­ing tech­nol­ogy- driven, high- value eco­nomic out­put to help ar­rest a slow­down in China.

That slow­down is fil­ter­ing through to trans­ac­tion vol­umes on Alibaba’s on­line shop­ping plat­forms where sales growth has de­cel­er­ated in re­cent quar­ters, prompt­ing the e- com­merce com­pany to ex­pand into other ar­eas such as on­line video and lo­cal ser­vices.

In 2015, it in­vested $ 4.6 bil­lion in elec­tron­ics re­tailer Sun­ing Com­merce Group Co, its big­gest step to in­te­grate on­line and off­line shop­ping.

“( Alibaba) is look­ing for ways to bet­ter lever­age the tech­nol­ogy it has,” said Shang­hai- based re­tail an­a­lyst Ben Caven­der at China Mar­ket Re­search Group.

“It’s al­ways look­ing for new mod­els and new ways to drive growth, and it has ob­vi­ously seen a slow­down in on­line sales ... The ad­van­tage Alibaba has over a lot of brick- and mor­tar re­tail­ers is that it has prob­a­bly bet­ter cus­tomer data than just about any­body else.”

Alibaba grew into China’s largest e- com­merce re­tailer with its Taobao and Tmall plat­forms. In 2014 it in­vested $ 692.25 mil­lion into In­time and now owns 27.82 per­cent, with Shen hold­ing 9.17 per­cent. The pair plan to buy the rest of In­time us­ing in­ter­nal cash re­sources and ex­ter­nal debt fi­nanc­ing.

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