Macrovision-Gemstar Deal Worries Analysts
The deal calls for Gemstar shareholders to receive $6.35 per share or 0.255 shares of Macrovision stock. The deal, which is expected to close by June 2008, will be paid with cash from both companies and up to $800 million of debt financing.
News Corp. (NWS), which owns 40% of Gemstar, has agreed to the deal, said Richard Battista, CEO of Gemstar.
Together with Macrovision's past acquisitions All Media Guide (AMG) and Mediabolic, Gemstar brings a more diversified revenue stream and strong cash flow, said Cowen analyst Robert Stone in a Friday note. Macrovision is an investment banking client of Cowen.
Macrovision CEO Fred Amoroso plans to deliver Gemstar's TV Guide content and AMG's searchable music, video and games database through Mediabolic's middleware with Macrovision's content-protection features. The platform would give consumers a full listing of content available to any device connected via cable, satellite and mobile operators.Adding Internet content such as YouTube videos to the mix is an advantage that other companies will find hard to replicate, given that Macrovision's middleware functionality is being built into devices, Amoroso said on a conference call with analysts. He said delivering interactive advertising is another growth opportunity. The management team's experience, including Amoroso's track record running global services in Asia for IBM (IBM), is within "the bandwidth of everybody in the management team," Amoroso said.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV