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Technology Stocks : Gemstar Intl (GMST)
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To: KY who wrote (2078)2/23/2000 5:58:00 PM
From: Eric Jacobson   of 6516
 
I read through the proxy that came in the mail yesterday. If you haven't read it, here's my EricsNotes version.

1. GMST shareholders should like TVGIA because of their brand name. They may not have a light business model and readership of the paper version of TV Guide is declining, but they have good relations with cable companies and an increasingly popular website.

2. TVGIA shareholders should like GMST because of their patent portfolio and because they have nimble leadership that has been able to outfox TVGIA. There doesn't appear to be any reasons for TVGIA to not like GMST.

3. Together, we can kick some ass. Specifically, we can combine R&D, encourage adoption of a single interface by cable companies, and roll out the product and generate advertising revenues more quickly than if apart.

The section describing the courtship of the two companies makes for very interesting reading. It reads like a soap opera. TVGIA's Peter Boylan seems like a sharp guy and the one who really made it happen. He's the one who first proposed buying GMST; he's the one who worked on the aborted JV; and he's the one who eventually hammered out the details with Henry.

The rest is filled with covering their assess. All the senior management get really sweet employment agreements, and they're incorporating in Delaware to avoid the merger from being a taxable event for TVGIA's big shareholders. Those are the highlights as I read it.
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