Alibaba leads $ 2.6b bid for Intime Retail Group
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.