What: Shares of e-commerce company Zulily (NASDAQ: ZU) surged on Monday after the company announced that it was being acquired by Liberty Interactive (NASDAQ:QVCA) (NASDAQ: LVNTA). At 10:45 Monday morning, the stock was up 47%, slightly below the offer price of $18.75 per share.
So what: Liberty, which owns QVC and has a stake in the Home Shopping Network, will acquire Zulily for $18.75 per share, valuing the company at $2.4 billion. Under the deal, Liberty will provide $9.375 per share in cash along with 0.3098 newly issued shares of QVCA for each share of Zulily. The transaction has been approved by the boards of directors of both companies, and it's expected to close during the fourth quarter of 2015.
QVC CEO Mike George had this to say: "As the world leader in video and eCommerce retail, QVC is dedicated to reimagining shopping, entertainment and community as one. In zulily, we see a like-minded brand that shares our passion for discovering great products, for delivering honest value, and for building long term relationships with customers. Our teams are committed to learning from and inspiring each other and leveraging our platforms in new ways to accelerate growth, serve our customers better, and realize the full potential of both of these extraordinary brands."
Now what: The acquisition of Zulily ends a volatile ride for shareholders. The company went public in late 2013 with an IPO price of $22 per share, and the stock nearly doubled during the first day of trading. The stock peaked around $70 per share in early 2014, but has since collapsed as sales growth has slowed dramatically. The acquisition price of $18.75 per share is well below the IPO price, leaving early investors with a substantial loss.