Alibaba Group Holding Ltd unit to buy Chinese department store operator Intime Retail Group Co
A unit of Chinese e-commerce giant Alibaba Group Holding has agreed to acquire a stake in China-based department store operator Intime Retail Group Co, Bloomberg reported.
The venture between the two firms will have the unit of Alibaba purchasing 220.5 million shares at HK$7.5335 per share. It will also be subscribing to Intime Retail Group Co's convertible bonds worth HK$3.7 billion. The department store operator revealed in a filing that the stake is equal to a 9.9% stake of the enlarged firm, the report said.
As a result of the agreement, the two firms will create online-to-offline operations of their shopping malls, department stores and supermarkets. It can be recalled that in March last year, Alibaba billionaire founder Jack Ma had stated that he aimed to form a delivery network that is capable of reaching any destination in the mainland in a day. Alibaba then forged an alliance with five delivery firms and other partners to establish Cainiao Internet Technology Ltd in order to make this happen. In order to build and manage the logistics network, Cainiao will be pouring up to CNY 100 billion in eight years for the project according to Alibaba, the report said.
This is not the first investment for Alibaba as it gears up for a listing in the US which could potentially place the value of the firm to up to $200 billion. In February, it gave an offer to purchase the shares it did not yet own in digital mapping service AutoNavi Holdings Ltd which pushed the latter's value up to around $1.6 billion. Then, it also headed the investment amounting to $280 million of instant messaging service TangoMe Inc this month, the report said.
This has been a good year so far for Intime as its shares have increased 12% in Hong Kong trading while the benchmark Hang Seng Index dropped 5.3%, the report said.