Alibaba Group Holding Ltd is leading a bid to take department store operator Intime Retail Group Co private, as China's largest online retailer seeks to deepen its integration with bricks-and-mortar stores.

Alibaba and Intime's founder Shen Guojun will pay HK$10 ($1.29) for the Intime shares they do not already own, according to a statement to the Hong Kong Stock Exchange. The offer represents a 42 percent premium over the last closing price, and the maximum amount of cash required, including options, is about HK$19.8 billion.

Alibaba and Intime have been building their relationship for years. Alibaba originally took a stake in the retailer in 2014.

The partnership already gives Alibaba access to Intime's inventory and allows its online customers to pick up orders from physical stores. Privatization will allow Intime to work more closely on integrating online and offline shopping with a separate group of shareholders.

Intime shares, which were halted since Dec 28 pending an announcement, had fallen 8 percent in 2016.