April 29, 2016 / 11:25 AM / 3 years ago

BRIEF-Rovi Corp to buy TiVo

April 29 (Reuters) - Rovi Corp

* Rovi to acquire Tivo, creating $3 billion entertainment technology leader

* Rovi corp says deal valued at approximately $1.1 billion.

* Rovi corp says deal valued at for $10.70 per share in cash and stock

* Deal accretive to Rovi’s non-gaap eps within first 12 months

* Sees $100 million in annual cost synergies from deal

* Rovi will pay $2.75 per share in cash, or approximately $277 million

* Company will continue to be led by tom carson and upon closing of transaction will adopt iconic TiVo brand as new company name

* Expected synergies are in addition to tivo’s targeted current year $32 million adjusted ebitda increase from restructuring, margin improvements

* Cash consideration will be financed from cash on hand in combined company

* Rovi stockholders will own one share of new holding company for each share of rovi common stock owned as of closing

* $7.95 per share of deal price will be paid in shares of common stock of a new holding company that will own both rovi and tivo

* Offer represents a premium of approximately 40 percent over TiVo’s closing price of $7.66 on march 23, 2016

* Stock component of consideration is expected to be a tax-free exchange to tivo stockholders

* Combined company is expected to have $150 - $270 million on hand at closing

* Board of directors of combined company will include participation from tivo’s current board

* Post-Transaction, current Rovi stockholders will own between 66.8 percent and 72.9 percent of pro forma shares outstanding in new holding co

* Stock consideration of deal is subject to a two-way collar between average Rovi stock prices of $16.00 and $25.00

* Board of directors of combined company will include participation from TiVo’s current board

* With approval of deal, Rovi’s board approved adoption of a stockholder rights plan

* If co’s stock price increases between agreement date and closing, TiVo stockholders to receive fewer shares until average Rovi stock price is $25

* If co’s share price decreases between signing and closing, TiVo stockholders to receive more shares until average stock price reaches $18.71

* Between an average Rovi stock price of $18.71 and $16.00, Rovi has option to pay additional cash instead of issuing more shares

* If average Rovi stock price is below $16.00, Rovi may set exchange ratio between 0.4250 and 0.4969

* In no event will cash amount be more than $3.90 per share

* Boards of both companies have approved transaction

* Board adopted stockholder rights plan to “protect rovi’s $1.2 billion federal net operating losses” from effect of sec 382 of us internal revenue code

* Completion of TiVo deal would move Rovi “significantly closer” to 50 percent ownership change outlined in section 382

* Evercore is serving as financial advisor to Rovi and Cooley Llp is serving as legal counsel

* Liontree advisors is serving as financial advisor to TiVo and Skadden, Arps, Slate, Meagher & Flom llp is serving as legal counsel Source text for Eikon: Further company coverage:

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