Operators had better be standing by to handle this one: The nation’s two best known home-shopping TV operations, QVC and Home Shopping Network, are set to come together under an all-stock deal valued at approximately $2.1 billion put together by John Malone’s Liberty Interactive Corp.
Under the terms of the deal, Liberty Interactive, which owns QVC and already controls a 38% stake in HSN, will combine the two outlets. Shareholders in HSN will receive 1.65 shares of QVC’s Series A stock for each share of HSN. The companies said the offer values each share of HSN at $40.36, or a 29% premium, based on Wednesday’s closing stock prices.
After the deal, slated to close in the fourth quarter, Liberty Interactive said it planned to spin off its cable-TV operations into an independent company that will be called QVC Group. That unit will include Zulily, a flash-sale site QVC purchased in 2015 for $2.4 billion, as well as the Cornerstone unit of HSN, which includes brands such as Ballard Designs, Frontgate and Grandin Road.
“By creating the leader in discovery-based shopping, we will enhance the customer experience, accelerate innovation, leverage our resources and talents to further strengthen our brands, and redeploy savings for innovation and growth,” said Mike George, QVC President and CEO, in a prepared statement. “As the prominent global video commerce retailer and North America’s third largest mobile and eCommerce retailer, the combined company will be well-positioned to help shape the next generation of retailing.” George is expected to stay at the helm of the newly enlarged unit.
Liberty Interactive said Thursday it believed the deal would make the two businesses more competitive, create “meaningful synergies” through cost reductions and help to optimize programming across five different U.S. TV networks.
HSN has been operating without a traditional executive structure. Mindy Grossman, who had served as CEO of HSN for many years, left in April to take over operations of Weight Watchers International Inc. Three executives have run HSN in her stead.