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Liberty Interactive to buy online retailer Zulily for $2.4 billion

Media mogul John Malone's Liberty Interactive said it would acquire Zulily in a cash-and-stock deal valued at $2.4 billion to tap into the online retailer's younger clientele and its strong mobile presence.

Liberty Interactive, the media conglomerate which owns home shopping network QVC, is known for investing in a range of digital commerce businesses.

"Zulily really is the QVC of the Internet for a younger generation, so it was a natural thing to pay attention to and think about," Greg Maffei, Liberty Interactive president and CEO, told CNBC's "Squawk on the Street" on Monday.

"Many traditional retailers are having problems growing and the trend continues to be towards online."

Zulily, a website that hosts "flash" sales of clothing primarily for women and children, counts Chinese e-commerce giant Alibaba Group Holding as one of its shareholders. Alibaba held about 9 percent of Zulily's total common stock as of May 15.

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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.

The offer of $18.75 per share represents a premium of 49 percent to Zulily's Friday close. The company's stock was up 47 percent in trading Monday.

Up to Friday's close, Zulily's stock had fallen about 43 percent since its debut in November 2013.

Maffei said Zulily opened for trading to a lot of fanfare and public company valuations do not necessarily reflect their long-term value. He noted that Zulily is one of the fastest retailers to reach a billion dollars in sales.

"We think that growth trajectory, while it may not be quite as torrid as it was in the early years, can be very strong going forward," he said.

Maffei acknowledged that many valuations in the technology space have become fairly rich.

Liberty Interactive said it would buy Zulily for $18.75 per share, or $9.375 in cash and 0.3098 newly issued share of Liberty Interactive for each Zulily share.

"Candidly, the price we're paying for Zulily is not a low price based on the market multiple, but it is a price that we feel is going to be very attractive in the long term both for Zulily and QVC shareholders given what cost savings, and more importantly, what revenue growth and synergies we can bring together," he said.

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Maffei said Zulily may adopt aspects of QVC's culture, which depends on personalities to sell product, while QVC could feature more of the flash deals for which Zulily is known.

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.

—Reuters contributed to this report.