Alibaba Group Holdings, founded by Jack Ma Yun, offered HK$19.6 billion to take its Hong Kong-listed flagship Alibaba.com (1688) private.
The e-commerce company proposed HK$13.5 per share, matching the business-to-business site's initial public offering price when it listed on November 6, 2007, eight years after its founding.
The offer price also implies a premium of 45.9 percent over the closing price of HK$9.25 on November 8, the last trading day before its shares were suspended from trading.
The group and its subsidiaries hold 73.45 percent of Alibaba.com, which operates three marketplaces online. Six banks will provide financing for the buyout.
Alibaba.com chief financial officer Maggie Wu Wei said the privatization plan was not related to its talks with Yahoo! Inc.
The group is now in talks with Yahoo to buy back its 40 percent stake in the group.
Wu also said there were no plans to go public, adding that it will be "several years" away.
The buyout announcement came after Alibaba.com said fourth-quarter net profit declined for the first time in two years.
Net profit in the fourth quarter was 381.59 million yuan (HK$469.9), down 3.13 percent from the third quarter, and down 6.17 percent from a year back. Fourth quarter revenue was 945.64 million yuan.
Wu said the company faced challenges and that negative growth of paying members is expected to continue.
Last year paying members in China and globally fell 5.4 percent from 2010. This was because of "tightened requirements for membership acquisition and renewal."
Net profit for the year ended December 2011 was up 16.6 percent to 1.47 billion yuan, mainly on higher sales of value-added services and contributions from new businesses.
Revenue was up 15.5 percent to 5.56 billion yuan.