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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Rovi agrees to buy TiVo in $1.1 billion deal

Tribune News Service

SAN JOSE, Calif. – Confirming media reports, TV technology company Rovi announced Friday that it plans to acquire TiVo in a $1.1 billion cash-and-stock deal.

The merger would combine Rovi’s electronic media guide technology with TiVo’s expertise in digital video recorders and digital set-top boxes. Although Rovi CEO Tom Carson will head the combined company, it will adopt the name TiVo.

“By working together, Rovi and TiVo will revolutionize how consumers experience media and entertainment and at the same time build value for our stockholders,” Carson said in a statement.

Naveen Chopra, interim CEO of San Jose-based TiVo, added, “Our combination creates a more influential global player with a commitment to product innovation, which will be incredibly well positioned to redefine television.”

TiVo’s stock rose modestly on the news, climbing 53 cents, or 5.7 percent, to $9.96 a share. In recent trading, Rovi’s stock was off 16 cents, or about 1 percent, to $17.19 a share.

As part of the deal, Rovi, which is based in San Carlos, Calif., plans to pay about $10.70 per share for TiVo, including about $2.75 a share in cash and $7.95 a share worth of Rovi stock. The company plans to adjust those amounts depending on how its stock price changes between now and the completion of the deal. The agreement bars Rovi from having to pay any more than $3.90 a share in cash.

The agreement is subject to the approval of stockholders of both companies. It also subject to scrutiny by federal antitrust regulators. The companies expect the deal to close in the third quarter of this year.

The New York Times reported in March that the companies were negotiating a deal. TiVo’s stock price jumped 23 percent on the day the news was reported.

Founded in 1997, TiVo pioneered DVR technology, which it debuted in 1999. After the company’s innovation was widely copied, TiVo fought and won several high-profile, lucrative lawsuits to defend its patents. In recent years, the company has revamped its technology to make it easier for users to search for and watch video streamed from the Internet on their DVRs. The company has also focused on licensing its technology to pay television providers to use in their own set-top boxes.

TiVo, whose longtime CEO Tom Rogers left the company earlier this year, had 724 employees at the end of March.

Rovi was founded in 1983 and until 2009 was known as Macrovision. The company focuses on providing digital television programming guides and tools used by programmers to measure their audience and the effectiveness of their ads.