Alibaba, Intime founder offer HK$19.8bn to take retail group private

E-commerce giant Alibaba Group Holding has teamed up with the founder of Intime Retail (Group) Company to take the mainland shopping mall and department store chain operator private in a HK$19.8 billion cash transaction.

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Alibaba Investment, a wholly owned subsidiary of Alibaba, and an entity run by Intime chairman Shen Goujun made the offer on Tuesday, according to a joint filing with the Hong Kong stock exchange.

Under the proposed deal, shares in Intime will be cancelled in exchange for a payment by the joint offerors at HK$10 per share, representing a premium of approximately 53.59 per cent over the average closing price of Intime shares over the last 60 days, and 42.25 per cent over the closing price of HK$7.03 before trading was suspended on December 28.

Intime, which resumed trading on Tuesday, saw its shares jump 35.7 per cent to close at HK$9.54

“Put simply, the impetus behind this deal must be to ensure that Alibaba has control of a bricks-and-mortar platform to advance its ambitions in the retail space,” said Paul Haswell, a partner at international law firm Pinsent Masons.

Alibaba, which owns the South China Morning Post, would become the controlling shareholder of Intime under that deal, with its equity stake increasing to about 74 per cent from the current 28 per cent.