Macrovision Buying Gemstar-TV Guide for $2.8 Billion

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imageContent protection firm Macrovision (NSDQ: MVSN) is acquiring Gemstar-TV Guide for $2.8 billion in cash and stock. The companies say there will be opportunities to combine Gemstar’s guide services with Macrovision’s own distribution and delivery technology. The deal calls for Gemstar-TV Guide shareholders to receive $6.35 per share in cash, a 6 percent premium over Thursday’s closing price. The release notes, however, that the offering price represents a 29 percent premium over Gemstar’s share price in July, when it announced it would review strategic alternatives including a possible sale. That decision came with the blessing of News Corp., (NYSE: NWS) a 41 percent owner of the company.

Shareholders may also elect to receive .2548 shares of Macrovision stock; upon completion, Gemstar shareholders would hold 47 percent of the combined company. The deal is expected to close in Q208, subject to the typical conditions. Both CEO Rich Battista and CFO Bedi Singh of Gemstar will be leaving the company upon close. Release | Webcast (9:00 AM ET) | Slides

The whole deal is being couched in the language of openness and consumer freedom: Combining Macrovision

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Frank Sinton

Congrats goes out to the team at Gemstar-TV Guide, although i hope the employees received more cash than stock if the first day of market reaction is any indication….

One glaring hole in TV Guide's offering: online video discovery – and not just the one-off UGC videos. I'm talking about the web shows, video blogs, and internet TV series that has been very popular with the 14-29 year-old demographic.

Strategically, Macrovision will have to explore the world of online video discovery (beyond just traditional TV content) to capture the younger demographic.

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