Intime Retail Group might be acquired by its founder, Shen Guo Jun, and the e-commerce giant, Alibaba, as the two have joined and made a $2.6 billion bid.
Intime Retail Group Co. Ltd. is a Chinese company. It is based in Hong Kong, Hong Kong. Intime operates and manages shopping malls and department stores. It was founded by Shen Guo Jun. The retailer manages and operates about 29 department stores. It is also in charge of around 17 shopping malls. These are spread throughout China.
Alibaba Group Holding Limited is an e-commerce company. It is based in Hangzhou, China and was founded in 1999. The company is specialized in business-to-business, business-to-consumer, and consumer-to-consumer sales services. These are offered through web portals. Alibaba is perhaps best known internationally for two of its services. Aliexpress and Taobao are internet portals, similar to eBay.com.
Famous for its online services, Alibaba may now be targeting the offline. Earlier this week, the company announced its bid for Intime. As such, the e-commerce giant may be turning to brick-and-mortar stores.
Alibaba Group will be joined in its bid by Shen Guo Jun. Together, the two have made an almost $2.6 billion offer for the retailer. Alibaba is already in relations with Intime.
The online and offline services first started collaborating back in 2014. At the time, Alibaba took its first stake in the retailer. In 2015, Daniel Zhang became the Intime chairman. Before occupying the said position, Zhang was Alibaba’s CEO.
Alibaba already holds shares in Intime. It holds almost 28 percent of the retailer’s shares. Shen Guo Jun, its founder, holds about 9.20 percent. The two have released details about their acquisition plans.
On Tuesday, they revealed that they would be offering HK$10 per share to Intime. This would mark an over 42 percent surge when compared to the company’s last stock price. On December 28, the company suspended trading. At the time, it had an HK$7.03 value per share. Trading was suspended as it was waiting for an announcement.
Alibaba and Shen also offered financing details. They will reportedly fund the purchase through external debt financing. Internal cash resources will also be used. The two are planning to buy the remaining company shares.
Following the Tuesday announcement, Intime shares reported a rise. Its stock increased by 35 percent per share.
Intime officials also released a statement. According to them, Alibaba and Shen will be implementing a series of changes. They will be exploring the sector’s development opportunities. A series of long-term growth strategies may also be implemented. Intime’s short-term growth might, as such, be affected. However, its long-term one should be advantaged by such changes.
Daniel Zhang, the Alibaba Group CEO, also offered details. According to him, the Intime detail might come to represent a new retail form. This could represent a long-term growth potential. It would be based on Internet data and technology.
Back in October, Zhang expressed a similar idea. At the time, he pointed out the need for an online and offline collaboration. More exactly, Zhang stated that online sales must not be grown in isolation. Instead, they should help retailers upgrade their systems. As such, a new retail model could be born.
Alibaba is not at its first physical retailer acquisition. It has either bought or invested in a number of other such services. Haier Electronics Group and Suning Commerce Group Co. are amongst such investments.
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