NEW YORK Macrovision, a provider of digital content management products, has agreed to acquire Gemstar-TV Guide for about $2.8 billion in cash and stock, the companies said Friday.
Gemstar CEO Rich Battista will leave the company once the deal closes. Macrovision president and CEO Fred Amoroso will run the merged entity and keep the same titles.
A sale of the programming guide firm has been expected since 41 percent shareholder News Corp. earlier this year pushed for a strategic review.
Under the terms of the sale, Gemstar stockholders can choose $6.35 in cash or 0.2548 of a share of common stock in a new holding company that will own both Gemstar and Macrovision. The per share value represents a 29 percent premium to the 10 day average closing price of Gemstar's stock prior to its review of strategic alternatives announced on July 9. The cash laid out to Gemstar shareholders will not exceed $1.55 billion.
Macrovision stockholders will own approximately 53 percent of the combined company, and the former Gemstar-TV Guide stockholders will own approximately 47 percent. The transaction is expected to close by the early second quarter of 2008.
The companies said the combination would allow content to move more easily across different distribution platforms. "Combining Macrovision's and Gemstar-TV Guide's solution portfolios will enable extensive libraries of commercial and personal-protected content to be accessible on numerous devices through simple and intuitive guides," the companies said in a statement. "For example, consumers will be able to pull up a guide on their TV and receive personalized content and information regarding their favorite TV shows, read movie reviews before purchasing or renting a film, view personal photos, or tap into their music library."
News Corp. has agreed to vote its Gemstar shares in favor of the deal. Its stake is valued at about $1.15 billion in the deal.
"This is a terrific transaction for our stockholders, giving them compelling value and a chance to participate in the opportunity to join forces with Macrovision to maximize value for all of our constituencies," said Battista. "We believe that the combined entity, with its complementary technologies, customers and global presence has the potential to redefine the consumer entertainment experience and drive significant additional stockholder value."