September 25, 2015 (Shareholders Foundation) - An investor who currently holds shares of Zulily Inc (NASDAQ:ZU), filed a lawsuit in effort to halt the proposed takeover of Zulily Inc. by Liberty Interactive Corporation for $18.75 per share.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NASDAQ:ZU stockholders by agreeing to sell Zulily Inc too cheaply via an unfair process to Liberty Interactive Corporation.

On August 17, 2015, Liberty Interactive Corporation (Nasdaq: QVCA, QVCB, LVNTA, LVNTB) and Zulily Inc (NASDAQ:ZU) announced that they have entered into an agreement under which Liberty Interactive will acquire all outstanding shares of Zulily Inc (NASDAQ:ZU) for $18.75 per share.

However, the plaintiff claims that the proposed consideration NASDAQ:ZU shareholders will receive is grossly inadequate and undervalues Zulily Inc. Indeed, at least one analyst has set the high target price for NASDAQ:ZU shares at $19.00 per share. Furthermore, the plaintiff claims that while Zulily’s stock went public at $22 per share in November 2013 and skyrocketed to $73.50 in February 2014, Zulily’s stockholders now stand to receive only a consideration valued at only $18.75 a share. Zulily Inc reported that its annual Total Revenue rose from $18.38 million in 2010 to over $1.2 billion in 2014 and that its Net Loss of $7.00 million in 2010 turned into a net Income of $14.89 million in 2014. Shares of Zulily Inc (NASDAQ:ZU) grew to as high as $68.39 per share in February 2014.

In addition, the plaintiff claims that the process is also unfair to NASDAQ:ZU stockholders. Indeed, concurrent with the execution of the Agreement, Zulily's founding shareholders, representing approximately 45% of zulily's outstanding shares, have already signed a Tender and Support Agreement, pursuant to which they have agreed to tender all of their shares into the exchange offer, subject to certain exceptions.