Alibaba Group Holding Ltd., said its fully-backed home improvement chain Easyhome will take its new retail arm public via a deal worth up to $5.65 billion.
The investment in Easyhome is from a state-backed conglomerate, Wuhan Zhongshang Commercial Group Co Ltd. The conglomerate said in a statement that it would buy Easyhome New Retail by issuing 6 billion shares priced at 6.18 yuan each.
The deal will see the value the unit at 36.3 billion yuan to 38.3 billion yuan ($5.35 billion to $5.65 billion) and result in a so-called backdoor listing on the Shenzhen bourse.
Easyhome is now the listed firm’s controlling shareholder after the deal, while Alibaba Group Holding Ltd (BABA.N) and 22 other investors including Sequoia Capital LLP’s Chinese investment venture and Taikang Life, will also own stakes, Wuhan Zhongshang said.
Shares in Wuhan Zhongshang rose by their maximum allowed 10 percent to a two-month high after the announcement.
Easyhome started operations in 1999 and is now China’s second-biggest home improvement supplies and furniture chain operator.
Wuhan Zhongshang Commercial Group Co Ltd., is principally engaged in the commercial retailing business. The Company’s commercial retail business mainly includes modern department stores, shopping malls, supermarkets and pharmaceutical retailing businesses.
The Company is also engaged in the leasing business. The Company mainly operates its business in Hubei Province, China.