NEW YORK (AP) - The owner of QVC is buying online flash deal business Zulily in a cash-and-stock deal valued at approximately $2.32 billion.
While Zulily's sales topped $1 billion last year, its growth has slowed and its shares have been in decline since February of last year.
The per-share price paid by QVC is below the $22 Zulily got during its initial public offering in November 2013, and far lower than the $73.50 that company shares hit shortly after its IPO.
Liberty Interactive Corp. will pay $9.375 in cash and 0.3098 newly issued shares of QVCA for each Zulily share. The transaction is valued at $18.75 per share. That's a 49 percent premium to Zulily's Friday closing price of $12.57.
The companies put the transaction's value at $2.4 billion.
Shares of Zulily jumped 45 percent at the opening bell Monday to $18.22.
Zulily has had problems keeping active shoppers on its site. Zulily greatly expanded the products on its site to change that, but CEO Darrell Cavens said that the company may have gone too far in that regard. Customers began to complain that they could no longer search through the site as quickly as they had grown accustomed to.
In May, the same month that the company cut its sales outlook for the year, Chinese e-commerce powerhouse Alibaba disclosed that it had taken a 9.3 percent stake in Zulily.
Zulily Inc. will keep its headquarters in Seattle, with Darrell Cavens remaining as CEO. The company will become part of the QVC Group, which includes QVC Inc. and its interest in HSN Inc.
The boards of both companies have approved the deal, which is targeted to close in the fourth quarter.