(Yicai Global) Jan. 25 -- Easyhome Investment Holdings Group, a Chinese home decor giant backed by Alibaba Group, will take its new retail arm public through a backdoor listing that could value the unit at as much as CNY38.3 billion (USD5.6 billion).

Shenzhen-listed shopping mall operator Wuhan Zhongnan Commercial Group will pay between CNY36.3 billion (USD5.3 billion) and CNY38.3 billion for Beijing Easyhome Furnishing Chain Store Group, it said in a statement yesterday. A reverse merger is a quicker and easier listing route than an initial public offering.

Sixteen investors, including Alibaba Group Holding and Taikang Life Insurance Group, paid CNY13 billion for 36 percent of the unit last February. Easyhome Investment owns 42 percent, while Alibaba has 9.6 percent, making the e-commerce giant its third-largest shareholder.

Shares of Zhongnan Commercial [SHE:000785] jumped by the daily trading limit of 10 percent today and yesterday. They ended the week at CNY8.13 (USD1.20).

Easyhome Investment operates over 220 home furnishing stores across 29 provinces in China. Set up in 2015, Easyhome Furnishing runs the company's core business. Its revenue rose 19 percent from October 2015 to CNY7 billion in October 2018, according to earnings reports.

Easyhome will take over the reins of the listed company from main shareholder Wuhan Shanglian and actual controller Wuhan State-Owned Assets Management, the statement said. Easyhome's founder Wang Linpeng will become Zhongnan Commercial's actual controller. 

Editor: Emmi Laine