Asexpected, has agreed to acquireDVR company TiVo Inc.via a cash-and-stock transaction worth about $1.1 billion.
Rovi willpay $10.70 per TiVo share, of which $2.75 will be in cash, according to anApril 29 news release. The remaining $7.95 will be paid through shares ofcommon stock in a new holding company that will own both Rovi and TiVo.The transaction's stock component will be governed by a two-way collar betweenaverage Rovi stock prices of $16 and $25 and is expected to be a tax-freeexchange to TiVo stockholders.The deal has been approved by the boards of both companies.
Post-transaction,current Rovi stockholders will own between 66.8% and 72.9% of the pro formashares outstanding in the new holding company, assuming that at average Rovistock prices between $16 and $18.71.
Rovi willadopt the TiVo brand upon the transaction's completion. The deal is subject tocustomary closing conditions, including approval from TiVo and Rovistockholders. The transaction is expected to close inthe third quarter.
Thecombined company will include directors from the TiVo board and will be led byRovi CEO Tom Carson.
Evercoreand Cooley LLP served as Rovi's financial adviser and legal counsel,respectively, on the transaction. Meanwhile, LionTree Advisors served as TiVo'sfinancial adviser, with Skadden Arps Slate Meagher & Flom LLP as legalcounsel.