In a marriage of the country’s two best known cable TV shopping channels, QVC and Home Shopping Network (HSN) are set to merge in an all-stock deal valued at roughly $2.1 billion.
Liberty Interactive, which owns QVC, already owns a 38% stake in HSN. Under the deal, Liberty will acquire the remaining 61.8%. In return, HSN shareholders will get fixed consideration of 1.65 shares of Series A QVC Group common stock for every share of HSN’s common stock, Liberty said in a statement. The companies said the offer represents a per-share price of $40.36, a 29% premium to HSN’s closing share price on Wednesday.
Liberty Interactive President and CEO Greg Maffei said the combined company will be the third-largest electronics retailer in the United States and will be large enough to be listed as an S&P 500 stock. The merger would better position the companies to compete against the likes of Amazon and Wal-mart as consumers shift their buying habits from cable TV to the internet.
“The addition of HSN will enhance QVC’s position as the leading global video ecommerce retailer. Every year they together produce over 55,000 hours of shoppable video content and have strong positions on multiple linear channels and [over-the-top] platforms,” Maffei said.
The deal is scheduled to close in the fourth quarter, after which Liberty would spin off its cable-TV operations into an independent company.
HSN has been operating without a traditional chief executive since April when longtime CEO Mindy Grossman decamped for Weight Watchers International. She was replaced by a team of three executives.
QVC had $8.7 billion in sales last year, while HSN did $3.5 billion, though television shopping networks have seen declines in recent years.
Liberty said in addition to scale and increased ecommerce capabilities, the deal would provide optimized programming across cable networks and cross-marketing opportunities. The companies also said that HSNi’s lower debt leverage would provide “financial optionality.”