Shares of Alibaba (NYSE:BABA) Group Holding Limited (NYSE:BABA) showed movement in today's trading session following the announcement that the company, along with another minority shareholder, has agreed to sell its entire stake in the department store chain Intime.
The sale to a consortium, which includes Youngor Group and members of Intime’s management team, is expected to result in gross proceeds of approximately RMB7.4 billion (USD1 billion) for Alibaba.
Alibaba anticipates recording a loss of about RMB9.3 billion (USD1.3 billion) from the transaction. The deal's completion is contingent upon receiving merger control clearance from the People's Republic of China and fulfilling other closing conditions.
Jefferies analyst Thomas Chong commented on the deal, stating, "Our view, the disposal of Intime was expected by the market, as a number of media reports (e.g. SCMP) have mentioned talks about a potential sale over the past few days.
We believe the disposal of Intime aligns with BABA's strategy of focusing on its core business. We believe disposals of non-core assets will help return value to shareholders."
Alibaba's decision to divest its 99% equity interest in Intime is seen as a strategic move to concentrate on its primary business operations.
The sale is part of Alibaba's broader strategy to streamline its portfolio and focus on core competencies, which could potentially enhance shareholder value in the long term.
