Alibaba discusses jobs with Trump
Alibaba chairman Jack Ma met Donald Trump on Monday to discuss how the online retailer could help create 1-million US jobs, keying in on one of the president-elect’s chief concerns amid fraught relations between China and the incoming administration.
Alibaba Group is leading a bid to take department store operator Intime Retail Group private, as China’s largest online retailer seeks to deepen its integration with brick-and-mortar stores.
Alibaba and Intime’s founder, Shen Guojun, will pay HK$10 (R17.60) for the Intime shares they do not already own, according to a statement to the Hong Kong stock exchange.
The offer represents a 42% premium over the last closing price, and the maximum amount of cash required, including options, is about HK$19.8bn (R34.75bn).
Alibaba and Intime have been building a relationship for years. Alibaba originally took a stake in the retailer in 2014 and Alibaba CEO Daniel Zhang became Intime 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.
Privatisation will allow Intime to work more closely on integrating online and offline shopping with a separate group of shareholders.
“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. “Intime’s valuation is relatively low now so it would be a good time to buy.”
Intime shares, which were halted since December 28 pending an announcement, fell 8% in 2016, compared with the 0.4% drop in the city’s benchmark Hang Seng Index.
Alibaba gained 8.1% in 2016 in New York.
Alibaba is one of China’s most aggressive dealmakers.
The company announced 35 deals over the past 12 months with a total value of $15.2bn, according to data compiled by Bloomberg.
Alibaba has bought or invested in a number of physical retail chains, including Suning Commerce Group and Haier Electronics Group, as it tries to revamp the country’s $4.5-trillion traditional retail industry.
Founder Jack Ma’s goal is to replace distributors and middlemen and let stores buy directly from suppliers based on realtime demand and inventory.
The deals flesh out its own online shopping offerings, open sales channels and expand its logistics network.
Alibaba also sees an opportunity in helping Chinese brands upgrade their computer systems, allowing them to adjust inventories more quickly in response to demand.
Ma has said he sees “tremendous challenges” for pure e-commerce operators as the country’s economy slows.
“The most important opportunity on the horizon is not growing online sales in isolation but rather helping traditional retailers upgrade into a brand new retail model,” Zhang said in October.
Ma met US president-elect Donald Trump on Monday to discuss how the Chinese company could add US businesses to its platform.
Alibaba owns about 27.8% of Intime and Shen owned 9.17% of shares as of Tuesday, according to the filing.
Intime operated and managed 29 department stores and 17 shopping malls in China as of the end of June 2016.
These were mainly in eastern Zhejiang province, according to the company’s semi-annual report.
It also has stores in Beijing, Anhui province and Guangxi province.