Alibaba is offering to buy Intime Retail, a department store chain, for 2.55 billion U.S. dollars.

Alibaba Investment, a wholly-owned subsidiary of Alibaba Group, announced Tuesday that it, in partnership with Intime's founder Shen Guojun, has asked Intime's board to propose the privatization plan to shareholders.

Alibaba and Shen are offering to pay 10 Hong Kong dollars per share of Intime, a premium of 42 percent over the closing price on Dec. 28, and a total of up to 19.8 billion Hong Kong dollars (17.7 billion Chinese yuan or 2.55 billion U.S. dollars).

Alibaba is already Intime's biggest shareholder, holding a 28 percent stake which will be raised to 74 percent after the deal.

Boosted by the news, Intime shares in Hong Kong surged on Tuesday after they resumed trading, closing up 35.7 percent at 9.54 Hong Kong dollars.

Intime Retail operates 29 department stores and 17 shopping malls, mainly in China's biggest cities.