Macrovision to Buy Gemstar-TV Guide for $2.8B
On Friday, Macrovision said it will buy Gemstar-TV Guide International Inc. (Nasdaq: GMST), which has been looking for a new home since July. (See Macrovision Gets Gemstar and Gemstar Could Seek Sale .)
In addition to supplying IPGs and other set-top apps to cable operators and telcos such as Verizon Communications Inc. (NYSE: VZ) and its set-top partners, Gemstar also has a more direct relationship with Comcast Corp. (Nasdaq: CMCSA, CMCSK), and that's a relationship that should fall squarely into Macrovision's lap once the deal is closed.
Gemstar owns 49 percent of GuideWorks LLC, a joint venture with Comcast, which holds a majority share. (See Gemstar Sale Could Shake Up IPGs.)
Macrovision, a company that specializes in encryption and digital rights management services and technologies, said the per share value of the deal is a 29 percent premium to the 10-day average closing price of Gemstar common stock prior to July 9, the day Gemstar said it was on the block. The cash consideration to Gemstar shareholders will not exceed $1.55 billion.
News Corp., which holds 41 percent of Gemstar's common stock, has already agreed to support the deal, expected to close in the second quarter of 2008. At that time, Gemstar CEO Rich Battista and CFO Bedi Singh will be leaving the company. Fred Amoroso will serve as president and CEO of the combined company, and James Budge will be CFO.
Macrovision said the deal will allow it protect high-value content and to support "the entire value chain" of digital services and the devices that hook into them.
— Jeff Baumgartner, Site Editor, Cable Digital News