Liberty Interactive, which owns home shopping network QVC, said it would acquire Zulily in a deal valued at $2.4 billion to tap into the online retailer’s younger clientele and its strong mobile presence.
Zulily, a website that hosts “flash” sales of clothing primarily for women and children, counts Chinese ecommerce giant Alibaba Group Holding as one of its shareholders.
Alibaba held about 9 percent of Zulily’s total common stock as of May 15.
The offer of $18.75 per share represents a premium of about 49 percent to Zulily’s Friday close. The company’s shares rose 49 percent to $18.73 in early trading on Monday.
Zulily sales growth has slowed recently, hurt by increasing competition from other flash sales sites such as Boston-based Rue La La and giants such as Amazon.com.
Mike George, chief executive of QVC, said the two companies target similar customers who have above-average income, but had little overlap.
“Only 6 percent of Zulily’s active customers made a purchase on QVC,” George said on a conference call.
The combined company would have annual revenue of more than $10 billion, QVC, which is about 30 years old in the U.S., said.
John Malone, the chairman of Liberty Interactive who also runs Liberty Media, is well known for buying and selling cable and media companies.
Liberty Interactive said in 2014 its board had approved splitting into two tracking stocks, one for its cable shopping business QVC Group and the other for its digital commerce, Liberty Digital Commerce.
Liberty Interactive said it would buy Zulily for $18.75 per share, or $9.375 in cash and 0.3098 newly issued shares of Liberty Interactive for each Zulily share.
In the second quarter ended June 28, about 56 percent of Zulily’s orders were placed from a mobile device, up from about 49 percent a year earlier.
QVC reached about 317 million homes globally in fiscal year 2014. Mobile as a percentage of ecommerce orders, excluding a China joint venture, was about 41 percent for the company.
Once the deal closes, expected in the fourth quarter, Zulily will remain based in Seattle and continue to be run by Chief Executive Darrell Cavens.
Baker Botts is Liberty Interactive’s legal adviser. Goldman Sachs is the financial adviser to Zulily and Weil, Gotshal & Manges LLP and Cooley LLP are its legal advisers.
Zulily’s shares were up 47.9 percent $18.60 while Liberty Interactive shares fell as much as 4.8 percent to $28.79 on the Nasdaq.
Up to Friday’s close, Zulily’s stock had fallen about 43 percent since its debut in November 2013.
(By Devika Krishna Kumar; Additional reporting by Kshitiz Goliya in Bengaluru; Editing by Sayantani Ghosh and Maju Samuel)
This article originally appeared on Recode.net.