Liberty Interactive Corporation (“Liberty Interactive”) (Nasdaq:
QVCA, QVCB, LVNTA, LVNTB) and HSN, Inc. (“HSNi”) (Nasdaq: HSNI)
today announced that they have entered into an agreement whereby
Liberty Interactive will acquire the 62% of HSNi it does not
already own in an all-stock transaction.
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“We are excited to announce the acquisition of HSNi. 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 OTT platforms,” said Greg Maffei,
Liberty Interactive President and CEO. “The value of the combined
QVC, HSNi and zulily will be further highlighted when later this
year QVC Group becomes an asset-backed stock as part of the
previously announced split-off of Liberty Ventures.”
“We’re thrilled to welcome the HSNi team to our company. HSNi
founded the industry forty years ago and helped it grow with
exciting initiatives like Shop By Remote and media integrations
with leading content producers. 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. “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.”
“Joining the QVC Group will give us instant access to global
consumer markets, a leadership team with deep expertise and a
global perspective, and the opportunity to further strengthen our
content-based brand portfolios in a changing retail landscape,”
said Arthur C. Martinez, HSNi’s Chairman of the Board of Directors.
“We have both been innovators in a growing and dynamic retail
environment with a unique vision of what shopping should be, and as
new technologies continue to change our everyday lives, together we
can develop the next generation of shopping for the next generation
of consumers.”
Liberty Interactive believes the acquisition of HSNi will
provide the following benefits:
- Increase scale, enhancing the
competitive position of QVC Group
- Meaningful synergies through cost
reduction and revenue growth opportunities
- Increased development of eCommerce,
mobile and OTT platforms
- Optimize programming across five U.S.
networks
- Cross marketing to better engage
existing and potential customers
- Financial optionality due to HSNi’s
lower debt leverage
HSNi consists of HSN, a leading interactive multichannel
retailer, and Cornerstone, which is comprised of leading home and
apparel lifestyle brands including Ballard Designs, Frontgate,
Garnet Hill, Grandin Road and Improvements. Post-closing, HSNi
headquarters will remain in St. Petersburg and will be overseen by
Mike George.
Liberty Interactive currently owns 38.2% of HSNi and, under the
definitive agreement will acquire the remaining 61.8% stake, making
it a wholly-owned subsidiary, attributed to the QVC Group tracking
stock. HSNi shareholders will receive fixed consideration of 1.65
shares of Series A QVC Group common stock for every share of HSNi
common stock. Based on the Series A QVC Group common stock’s
closing price as of July 5, 2017 and the number of HSNi undiluted
shares outstanding as of May 1, 2017, this equates to a total
enterprise value for HSNi of $2.6 billion, an equity value of $2.1
billion, and consideration of $40.36 per HSNi share, representing a
premium of $9.06 per share or 29% to HSNi shareholders, based on
HSNi’s closing price on July 5, 2017.
Liberty Interactive intends to issue 53.4 million shares of QVC
Series A common stock to HSNi shareholders. Pro forma, QVC Group
total undiluted share count will be 504.3 million, comprised of
474.9 million shares of Series A common stock and 29.4 million
shares of Series B common stock, with former HSNi shareholders,
excluding Liberty Interactive, to own 10.6% of QVC Group’s
undiluted equity and 6.9% of the undiluted voting power, based on
the number of shares outstanding as of April 30, 2017. Following
the completion of the transaction, Liberty Interactive expects to
continue its repurchases of QVC Group common stock.
The acquisition of HSNi is expected to be completed by the
fourth quarter of 2017. The completion of the acquisition is
subject to certain customary conditions, including (i) the receipt
of requisite regulatory approvals, including approval from the
Federal Communications Commission and the expiration or termination
of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act and (ii) approval by a majority of the
outstanding voting power of HSNi shareholders. A voting agreement
has been obtained from Liberty Interactive to vote its HSNi shares
in-favor of the transaction. Approval of the Liberty Interactive
stockholders is not required, and is not being sought, for the HSNi
acquisition. Upon closing, the Liberty Interactive Board of
Directors will be expanded by one to include a director from the
HSNi Board of Directors; this director will be selected by Liberty
Interactive.
The previously announced transaction between Liberty Interactive
and General Communication, Inc. (“GCI”) and subsequent split-off of
Liberty Ventures is expected to close later in 2017. Simultaneous
with that closing, QVC Group, including wholly-owned subsidiaries
QVC, Inc., zulily and HSNi (or, if the HSNi acquisition has not yet
closed, following such closing), will become an asset-backed stock
and Liberty Interactive will be renamed QVC Group, Inc. Neither the
GCI acquisition nor the HSNi acquisition is conditioned on the
completion of the other, and no assurance can be given as to which
of these transactions will be completed first.
Allen & Company is serving as financial advisor and Baker
Botts LLP is serving as legal advisor to Liberty Interactive.
Centerview Partners and Goldman Sachs Group, Inc. are serving as
financial advisors and Davis Polk & Wardwell LLP is serving as
legal advisor to the Special Committee of the Board of Directors of
HSNi.
Important Notice: Liberty Interactive (Nasdaq: QVCA, QVCB,
LVNTA, LVNTB) President and CEO, Greg Maffei, QVC President, CEO
Mike George and HSN, Inc. (Nasdaq: HSNI) Office of the CEO and CFO,
Rod Little , will discuss this transaction in a conference call
which will begin at 9:00 a.m. (E.D.T.) on July 6, 2017. The call
can be accessed by dialing (888) 394-8218 or (323) 701-0225, with
participant passcode 1505706 at least 10 minutes prior to the start
time. An accompanying presentation will be posted to the Liberty
Interactive website prior to the call. The call will also be
broadcast live across the Internet and archived on our website. To
access the webcast go to http://www.libertyinteractive.com/events. Links to
this press release will also be available on Liberty Interactive's
website.
Forward-Looking Statements
This communication includes certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Words such as “may,” “will,” “could,” “anticipate,”
“estimate,” “expect,” “predict,” “project,” “future,” “potential,”
“intend,” “plan,” “assume,” “believe,” “forecast,” “look,” “build,”
“focus,” “create,” “work” “continue” or the negative of such terms
or other variations thereof and words and terms of similar
substance used in connection with any discussion of future plans,
actions, or events identify forward-looking statements. These
forward-looking statements include, but are not limited to,
statements about the proposed acquisition (the “proposed
acquisition”) of HSNi by Liberty Interactive, the timing of the
proposed acquisition and Liberty Interactive’s proposed transaction
involving General Communication, Inc. (“GCI” and the “proposed GCI
transaction”), the capitalization of the QVC Group following the
proposed acquisition, the continuation of Liberty Interactive’s
stock repurchase program, the realization of estimated synergies
and benefits from the proposed acquisition and the proposed GCI
transaction, business strategies, market potential, future
financial prospects, new service and product offerings, the
renaming of Liberty Interactive and other matters that are not
historical facts. These forward-looking statements involve many
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements,
including, without limitation, the expected timing and likelihood
of completion of the proposed acquisition and the proposed GCI
transaction, including the timing and satisfaction of conditions to
these transactions that could reduce anticipated benefits or cause
the parties to abandon the respective transaction, the ability to
successfully integrate the businesses, risks related to disruption
of management time from ongoing business operations due to the
proposed acquisition, the risk that any announcements relating to
the proposed acquisition could have adverse effects on the market
price of the common stock of HSNi or Liberty Interactive, the risk
that the proposed acquisition and its announcement could have an
adverse effect on the ability of HSNi and Liberty Interactive to
retain customers and retain and hire key personnel and maintain
relationships with their suppliers and customers and on their
operating results and businesses generally, market conditions
conducive to stock repurchases, the risk of the amount of any
future dividend HSNi may pay, and other factors. These
forward-looking statements speak only as of the date of this
communication, and Liberty Interactive and HSNi expressly disclaim
any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statement contained herein to
reflect any change in Liberty Interactive’s or HSNi’s expectations
with regard thereto or any change in events, conditions or
circumstances on which any such statement is based. Please refer to
the publicly filed documents of Liberty Interactive and HSNi,
including the most recent Forms 10-K and 10-Q for additional
information about Liberty Interactive and HSNi and about the risks
and uncertainties related to the business of each of Liberty
Interactive and HSNi which may affect the statements made in this
communication.
No Offer or Solicitation
This communication relates to a proposed business combination
between HSNi and Liberty Interactive. This announcement is for
informational purposes only and nothing contained in this
communication shall constitute an offer to buy or a solicitation of
an offer to sell any securities or the solicitation of any vote in
any jurisdiction. No offer of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Additional Information
Liberty Interactive stockholders, HSNi stockholders and other
investors are urged to read the registration statement and the
proxy statement/prospectus to be filed regarding the proposed
acquisition and any other relevant documents filed with the SEC, as
well as any amendments or supplements to those documents, because
they will contain important information about the proposed
acquisition. Any definitive proxy statement(s) (if and when
available) will be mailed to stockholders of HSNi. Copies of these
SEC filings are available free of charge at the SEC’s website
(http://www.sec.gov). Copies of the filings together with the
materials incorporated by reference therein are also available,
without charge, by directing a request to Liberty Interactive
Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112,
Attention: Investor Relations, Telephone: (720) 875-5420. Copies of
documents filed with the SEC by HSNi will be made available free of
charge on HSNi’s website at http://www.hsni.com or by contacting
HSNi’s Investor Relations Department at HSN, Inc., 1 HSN Drive, St.
Petersburg, Florida 33729, Attention Investor Relations, Telephone:
(727) 872-1000, email: ir@hsn.net.
In addition, nothing in this communication shall constitute a
solicitation to buy or an offer to sell shares of GCI Liberty, GCI
common stock or any of Liberty Interactive’s tracking stocks. The
offer and issuance of shares in the proposed GCI transaction will
only be made pursuant to GCI’s effective registration statement.
Liberty Interactive stockholders, GCI shareholders and other
investors are urged to read the registration statement and the
joint proxy statement/prospectus to be filed regarding the proposed
GCI transaction and any other relevant documents filed with the
SEC, as well as any amendments or supplements to those documents,
because they will contain important information about the proposed
GCI transaction. Copies of these SEC filings will be available free
of charge at the SEC’s website (http://www.sec.gov). Copies of the
filings together with the materials incorporated by reference
therein will also be available, without charge, by directing a
request to Liberty Interactive Corporation, 12300 Liberty
Boulevard, Englewood, Colorado 80112, Attention: Investor
Relations, Telephone: (720) 875-5420. GCI investors can access
additional information at ir.gci.com.
Participants in a Solicitation
The directors and executive officers of HSNi and other persons
may be deemed to be participants in the solicitation of proxies
from the holders of HSNi common stock in respect of the proposed
acquisition. Information regarding the directors and executive
officers of HSNi is available in its definitive proxy statement for
HSNi’s 2017 Annual Meeting of Stockholders, which was filed with
the SEC on April 10, 2017, and in the other documents filed after
the date thereof by HSNi with the SEC. Investors may obtain
additional information regarding the interests of such participants
by reading the proxy statement/prospectus regarding the proposed
transaction when it becomes available. Free copies of these
documents may be obtained as described in the preceding
paragraph.
In addition, the directors and executive officers of Liberty
Interactive and GCI and other persons may be deemed to be
participants in the solicitation of proxies in respect of proposals
to approve the proposed GCI transaction. Information regarding the
directors and executive officers of Liberty Interactive is
available in its definitive proxy statement, which was filed with
the SEC on April 20, 2017, and certain of its Current Reports on
Form 8-K. Information regarding the directors and executive
officers of GCI is available as part of its Form 10-K filed with
the SEC on March 2, 2017. For other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be available in the proxy materials regarding the foregoing to
be filed with the SEC. Free copies of these documents may be
obtained as described above.
About Liberty Interactive
Corporation
Liberty Interactive Corporation operates and owns interests in a
broad range of digital commerce businesses. Those businesses are
currently attributed to two tracking stock groups: the QVC Group
and the Liberty Ventures Group. The businesses and assets
attributed to the QVC Group (Nasdaq: QVCA, QVCB) consist of Liberty
Interactive Corporation's subsidiaries, QVC, Inc. and zulily, llc,
and its interest in HSNi, Inc., and the businesses and assets
attributed to the Liberty Ventures Group (Nasdaq: LVNTA, LVNTB)
consist of all of Liberty Interactive Corporation's businesses and
assets other than those attributed to the QVC Group, including its
interests in Liberty Broadband Corporation and FTD, Liberty
Interactive Corporation's subsidiary Evite, and minority interests
in ILG, Lending Tree and Charter Communications.
About HSN, Inc.
HSN, Inc. (Nasdaq: HSNI) is a $3.5 billion interactive
multichannel retailer with strong direct-to-consumer expertise
among its two operating segments, HSN and Cornerstone. HSNi offers
innovative, differentiated retail experiences on TV, online, via
mobile devices, in catalogs, and in brick and mortar stores. HSN, a
leading interactive multichannel retailer which offers a curated
assortment of exclusive products combined with top brand names, now
reaches approximately 91 million homes ( with live programming 364
days a year). HSN.com offers a differentiated digital experience by
leveraging content, community and commerce. In addition to its
existing media platforms, HSN is the industry leader in
transactional innovation, including services such as HSN Shop by
Remote®, the only service of its kind in the U.S., the HSN Shopping
App for mobile handheld devices and HSN on Demand®. Cornerstone
comprises leading home and apparel lifestyle brands including
Ballard Designs®, Frontgate®, Garnet Hill®, Grandin Road® and
Improvements®. Cornerstone distributes approximately 300 million
catalogs annually, operates five separate digital sales sites and
operates 17 retail and outlet stores.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170706005538/en/
Liberty Interactive CorporationShane
Kleinstein720-875-5420orQVC, Inc.Colleen Rooney
(Media)484-701-1761colleen.rooney@qvc.comorHSN, Inc.Art
Singleton
(Analysts/Investors)727-872-4941Art.singleton@hsn.netorJill Kermes
(Media)727-872-4390Jill.kermes@hsn.net
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