Macrovision to buy Gemstar-TV Guide
SANTA CLARA, Calif. -- Macrovision Corp., which develops technology to prevent unauthorized copying and viewing of video, music and other content, said Friday it will buy television listings provider Gemstar-TV Guide International Inc. for $2.8 billion in cash and stock.
In a statement Friday, Macrovision and Gemstar said the combined company will allow consumers to pull up a guide on their TV and receive personalized content and information regarding favorite TV shows, read movie reviews before purchasing or renting a film, view personal photos, or tap into personal music libraries.
Plans for Gemstar-TV Guide's print operations weren't disclosed.
Gemstar-TV Guide shareholders will receive $6.35 in cash or 0.2548 of a share of common stock in a new holding company that will own both Gemstar-TV Guide and Macrovision. The cash component of the deal won't exceed $1.55 billion.
The company said the $6.35 per share value, based on the closing price of Macrovision stock Thursday, represents a 25 percent premium to Gemstar-TV Guide's closing price before it announced a strategic alternatives review on July 9.
In a filing with the Securities and Exchange Commission, Macrovision said it will raise $800 million of new debt to finance the acquisition, and said JP Morgan and Merrill Lynch have agreed to commit funds.
The board of the Los Angeles-based television media company has unanimously approved the transaction, which is expected to close by early second quarter 2008. Rupert Murdoch's News Corp., which owns about 41 percent of Gemstar-TV Guide, has agreed to vote in favor of the deal.
Macrovision stockholders will continue to own one share in the new company for each share held at closing. When the deal is completed, Macrovision shareholders will own about 53 percent of the combined company, and former Gemstar-TV Guide stockholders will own 47 percent.
Macrovision's Fred Amoroso will continue as president and chief executive of the new company. Macrovision's Chief Financial Officer James Budge will serve as CFO. The new board will include four directors designated by Macrovision, and three chosen by Gemstar-TV Guide.
Gemstar-TV Guide CEO Rich Battista and CFO Bedi Singh will leave when the deal closes.
JPMorgan served as financial adviser to Macrovision and UBS Investment Bank as financial adviser to Gemstar-TV Guide International.
Santa Clara, Calif.-based Macrovision has about 760 employees and reported revenue of $248 million for fiscal 2006. Gemstar-TV Guide, with about 1,600 workers, posted 2006 revenue of $571 million.