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.