ENGLEWOOD, Colo. & ST. PETERSBURG, Fla.--(BUSINESS WIRE)--
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 Corporation
Shane Kleinstein
720-875-5420
or
QVC,
Inc.
Colleen Rooney (Media)
484-701-1761
colleen.rooney@qvc.com
or
HSN,
Inc.
Art Singleton (Analysts/Investors)
727-872-4941
Art.singleton@hsn.net
or
Jill
Kermes (Media)
727-872-4390
Jill.kermes@hsn.net
Source: Liberty Interactive Corporation
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