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Alibaba seeks to take Intime Retail private in $2.6bn deal

RBR Staff Writer Published 11 January 2017

Alibaba is partnering with the founder of China's Intime Retail to take the department-store operator private.

The e-commerce giant currently holds nearly 28% of stake in Intime and if the proposed deal goes through, it would go on to become the controlling stakeholder of the department store company stretching its overall stake to nearly 74%.

Alibaba’s proposed transaction is said to be part of its strategy to transform conventional retail by taking advantage of its technology, substantial reach among consumers as well as rich data.

Alibaba CEO Daniel Zhang said: "China's total retail sector is a $4.5tn economy and is growing at 10.7% a year. 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.

"We don't divide the world into real or virtual economies, only the old and the new. Those who cling on to the old ways of retailing will be disrupted, and brick and mortar businesses will be able to create value for consumers if they are integrated with the power of mobile reach, real-time consumer insights, and technology capability to improve operating efficiency.

“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."

A scheme of arrangement deal has been put forward by Alibaba in this regard to Intime Retail.

As part of the proposed scheme of arrangement deal, Intime Retail shares will be made obsolete by the joint buyers Alibaba and Intime’s founder Shen Guojun in exchange of HK$10.00 ($1.29). This price is said to be 42.25% over the share price of the department store company before its trading was suspended in late December last year.

Intime operates 29 department stores as well as 17 shopping malls, primarily in first- and second-tier cities in the country. It is said to have a solid footprint, particularly in the Alibaba Group headquartered Zhejiang Province.

Alibaba’s proposed deal is subject to the meeting of customary closing conditions which includes the approval from the independent shareholders of Intime and also from the Grand Court of the Cayman Islands.


Image: Alibaba Group’s corporate campus in Xixi, Hangzhou, China. Photo: courtesy of Alibaba Group Holding Limited.