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TiVo Inc. Message Board

  • wwwhead222 wwwhead222 Nov 7, 2010 9:31 PM Flag

    Google buyout in 2011 makes sense

    It does not take a rocket surgeon to understand that Google is all about collecting very detailed data on individuals in order to better target them for extremely profitable advertising. Couple that with TiVo's ever-growing collection of technology and data on its subscriber's viewing habits and you have a natural synergy. It is my recollection, from past research on TiVo, that their poison pill expires in early January of 2011 (a few months).

    In short, the handful of articles below, would seem to indicate that a Google buyout in 2011 would make sense. This would be following more clarity in the litigation with Dish as well as expiration of the poison pill in TiVo's bylaws.

    I do have to say, this has certainly been one of the more interesting stocks to follow. The damage that large companies like Dish can inflict on a smaller innovator, by dragging out court proceedings for the better part of a decade, is both impressive and sad at the same time! I'm rooting for the "little guy" here...hopefully the federal judges also appreciate an underdog like TiVo.

    Google to Acquire More Companies as Big as YouTube, DoubleClick
    By Douglas MacMillan - Nov 5, 2010 2:46 PM MT

    TiVo Measures Effectivness of Fall Season TV Promos
    11/03/10 - Second-by-Second Audience Measurement Shows That...

    Is Dish considering swallowing TiVo's $7.5 billion poison pill?
    By Ben Drawbaugh posted Jun 10th 2009 6:34PM

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    • I went back to lookup that poison pill deal and below is some information to share. Basically, it looks like a $60 special dividend would be given to existing shareholders in a takeover situation. The provision expires 1/9/2011, but may be extended by the company at its discretion I believe.

      On January 9, 2001, the Board of Directors of TiVo Inc. (the "Company") declared a dividend of one preferred share purchase right (a "Right") for each share of common stock, $.001 par value...When exercisable, each Right will entitle the registered holder to purchase from the Company one one-hundredth of a share of Series B Junior Participating Preferred Stock (the "Preferred Shares") at a price of $60 per one one-hundredth of a Preferred Share, subject to adjustment (the "Purchase Price").

      The Rights are intended to enable all TiVo shareholders to realize the long-term value of their investment in the Company. They do not prevent a takeover, but should encourage anyone seeking to acquire the Company to negotiate with the Board of Directors prior to attempting a takeover. The Rights Plan will expire in January 2011.

      The Rights will expire on January 9, 2011, subject to the Company's right to extend such date (the "Final Expiration Date"), unless earlier redeemed or exchanged by the Company or terminated.

      1.1. Acquiring Person" shall mean any Person (as such term is hereinafter defined) who or which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the Common Shares of the Company then outstanding...

      Right Certificate
      ...each of which entitles the owner one-hundredth of a fully paid, nonassessable share of Series B Junior Participating Preferred Stock, par value $.001 per share (the "Preferred Shares") of the Company, at a purchase price of $60 per one one-hundredth of a Preferred Share....

      Even before TiVo’s latest legal victory, this bargaining power has enabled them to forge agreements with Cox, Comcast and DirecTV. Once companies like Time Warner and AT&T realize that TiVo is both ready and willing to put this kind of hurt on a business, it makes it a lot more palpable to swallow the carrot that TiVo offers through DVR partnerships.

      Based on my understanding of the complex agreement, in the event that Dish (or another acquirer) were to accumulate more than 15% of TiVo’s shares (or even announce the intention to acquire more than 15% of the shares), it would trip a provision that would entitle the other TiVo shareholders to a special $60 per share dividend This means that if Dish were to forcibly acquire TiVo, it would cost them $71 per share or close to $7.5 billion (more than Dish’s entire market cap.) If Dish tried to pay for the transaction in stock, TiVo shareholders would be entitled to $13.5 billion ($131 per share) in the buyout.

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