TiVo Corp., previously Rovi Corp., and its unit TiVo Solutions Inc., previously TiVo Inc., on March 27 agreed to settle an appraisal action filed by several TiVo Inc. shareholders who did not vote to approve the companies' $1.1 billion acquisition deal.
Pursuant to the settlement deal, TiVo will pay about $117.0 million, or $12.80 per share, to the petitioners, in exchange for the latter releasing and dismissing all of their claims, according to a Form 8-K filed March 31. Under the terms of the merger, which completed September 2016, Rovi paid TiVo Inc. shareholders $10.70 per TiVo share.
In November 2016, Driehaus Appraisal Litigation Fund LP, Driehaus Companies Profit Sharing Plan and Trust, and Richard H. Driehaus IRA filed an appraisal petition in the Delaware Court of Chancery for the 1,900,000 shares of common stock the group owned in TiVo Solutions. Another group comprising Fir Tree Value Master Fund LP and Fir Tree Capital Opportunity Master Fund LP filed a separate appraisal petition for their 7,200,000 common shares in TiVo Solutions. The court merged the two petitions in January 2017.
Regardless of the court's verdict on the consolidated action, the petitioners would have received a cash payment equivalent to the fair value of their TiVo Solutions shares in lieu of the TiVo shares they would have entitled to get in relation to the acquisition deal. The petitioners would have also received prejudgment interest on the appraisal award, to be compounded quarterly at a rate of 5% above the Federal Reserve Discount rate. Further, the shareholders sought payment for their costs and attorneys fees, the company said in a regulatory filing.
The payment will be sourced from a combination of cash held by the exchange agent for the TiVo deal and the company's existing cash on the balance sheet.