US home shopping firms set to merge

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The Independent Online
QVC Network, the Pennsylvania- based television shopping company, yesterday proposed a stock swap with Home Shopping Network that would merge the two companies to create a dollars 2bn-a-year ( pounds 1.37bn) retailing group headed by former Hollywood studio executive Barry Diller.

Mr Diller joined QVC last December and, together with Comcast Corp and Liberty Media, owns a controlling stake in the company. Liberty Media in December also acquired voting control of Home Shopping after buying dollars 160m worth of super voting class stock from the chairman, Roy Speer.

But Liberty later abruptly withdrew a dollars 640m offer for the remaining shares of Home Shopping, after a scandal broke at the network involving allegations that executives had secret financial interests in companies supplying merchandise to be sold on their network.

Under the terms of the latest proposal there would be a tax-free exchange of shares of QVC and Home Shopping, with the latter retaining its listing on the New York Stock Exchange but changing its name to QVC Network. The board of directors would consist of the current members of the QVC board.

The merged companies would be able to make annual cost savings as high as dollars 50m by streamlining areas such as distribution systems. Shopping by television is a fast-growing sector of the American retail market, with viewers buying products ranging from jewellery and kitchen goods to more expensive items such as cameras and camcorders offered at discount prices.

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