China’s Alibaba Group leads $2.6 bn bid to privatise Intime Retail Group Co

China's Alibaba Group Holding Ltd is leading a $2.6 billion bid to privatise Intime Retail Group Co Ltd in a move to digitise brick-and-mortar department stores even as growth in online sales started to slow.

Alibaba Investment Ltd and Intime founder Shen Guojun had offered HK$10 per Intime share - 42.25 per cent over the HK$7.03 price when trading stopped on 28 December pending an announcement. The stock rose as much as 38 per cent to its highest price since July 2015, when trading resumed today.

The offer comes with the government working on a broad internet sector strategy combining online and offline industries, encouraging technology-driven, high-value economic output to help arrest a slowdown in the world's second-largest economy.

That slowdown dented transaction volumes on Alibaba's online shopping platforms where sales growth had fallen over recent months, prompting the expansion of the e-commerce firm into other areas such as online video and local services.

The firm invested $4.6 billion in electronics retailer Suning Commerce Group Co Lt in 2015, its biggest step towards online integration and offline shopping.

"(Alibaba) is looking for ways to better leverage the technology it has," said Shanghai-based retail analyst Ben Cavender at China Market Research Group, Reuters reported.

Alibaba first took a stake in Beijing-based Intime in 2014 in a move to better integrate online and offline shopping, with Alibaba chief executive officer Daniel Zhang becoming Intime chairman the next year.

According to commentators, such forays could offer a neat solution to Alibaba's slowing, albeit still impressive, sales growth.

For all the hype, online was tapering, something even Alibaba's chairman Jack Ma admitted. Alibaba's Tmall.com platform showed Singles Day sales growth of about 32 per cent last year against 2015, compared with a 60 per cent surge the period prior. Also, while sales at Suning and Intime were down, the decline was starting to level off thanks to more innovative offerings.