Tycoon Thomas Lau has launched a bid to take the operator of Hong Kong's famous Sogo department stores private in a deal worth $1.8 billion, the company said on Monday.

In an announcement to the stock exchange, Lifestyle International said Lau would not increase his offer of $5 per share, noting a weak retail environment during the Covid pandemic and the 2019 social unrest, with mainland shoppers no longer visiting Hong Kong.

"Management maintains a pessimistic view of Hong Kong’s retail sector for the second half of 2022 as the recent rebound in local Covid-19 infections poses challenges to the recovery of Hong Kong’s economy and clouds the prospect of the long-awaited border reopening," the announcement said.

"Moreover, the worsening global economic outlook in the wake of intensifying geopolitical tensions and continuous supply chain disruptions, coupled with tightening monetary policies by various governments to tame soaring inflation, would further undermine business confidence and consumer spending."

The company, which reported a loss of $475 million for the six months ending in July, said it was unlikely to be able to raise money from the equity market in future, and noted that a delisting would reduce administrative and management costs while offering more flexibility going forward.

The announcement noted that the offer price was 60 percent above the value of the company's shares when trading was suspended on Friday. Trading in the shares was to resume on Monday following the announcement.