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Gemstar & TV Guide Announce Merger Agreement
PR Newswire - October 04, 1999 13:29
PASADENA, Calif. and TULSA, Okla., Oct. 4 /PRNewswire/ -- Gemstar International Group
Limited (Nasdaq: GMST) and TV Guide, Inc. (Nasdaq: TVGIA) announced today that they have
entered into a definitive merger agreement under which TV Guide, Inc. will become a wholly
owned subsidiary of Gemstar.
Under the merger agreement, TV Guide shareholders will receive .6573 shares of Gemstar
common stock for each share of TV Guide Class A & B common stock. The exchange ratio is not
subject to adjustment. TV Guide shareholders will, in the aggregate, receive approximately 45% of
the fully diluted shares of the combined company. The transaction value is approximately $9.2
billion based on Gemstar's October 1, 1999 closing stock price of $83.625 and assumed
indebtedness of approximately $600 million.
The combined company is expected to have an enterprise value of approximately $20 billion, with
revenues in excess of $1.5 billion, and EBITDA of approximately $400 million.
The transaction has the strong support of the boards of directors and management of both
companies. Voting agreements have been entered into by the principal shareholders of each
company to vote in favor of the transaction. Closing of the transaction will be subject only to very
limited conditions, including approval by shareholders of each company and the satisfaction of
regulatory requirements.
The Board of Directors of Gemstar will be expanded to twelve members. Six TV Guide directors
will join the board. Henry Yuen will serve as Chairman of the Board. A voting agreement has been
entered into between Henry Yuen and the two major shareholders of TV Guide.
Henry Yuen will continue as Chief Executive Officer of the company, which will be renamed TV
Guide International Inc. upon closing of the transaction. Elsie Leung will continue as the Chief
Financial Officer, and will serve as co-President & Chief Operating Officer in charge of
operations traditionally under Gemstar. Joachim Kiener shall serve as co-President & Chief
Operating Officer in charge of certain TV Guide, Inc. businesses. Peter C. Boylan III shall serve as
co-President & Chief Operating Officer in charge of certain TV Guide, Inc. businesses. Leung,
Kiener, and Boylan will join the newly formed Office of the Chief Executive with Mr. Yuen and
will serve as Chairman & CEO of their respective divisions. Stephen A. Weiswasser shall
continue as General Counsel and Executive Vice President.
"We are extremely excited about the prospects of the combined company," said Henry Yuen,
Chairman and Chief Executive Officer. "The strengths of Gemstar and TV Guide are
complementary and highly synergetic. TV Guide's relationship with publications, cable MSOs,
programmers and content providers are perfect complements to Gemstar's association with
broadcasters and consumer electronics manufacturers. Most importantly, TV Guide's experience
and relationship with program-related advertiser customers will greatly enhance the combined
company's vision of creating a rapidly growing advertising and transaction business based on its
highly-used electronic program guide platforms."
"Gemstar has developed a truly impressive global presence in the highly competitive consumer
electronics industry that will be very complimentary with our TV Guide franchise, brand name,
and the consumer recognition we have created over the past years", said Joe Kiener, Chairman &
CEO of TV Guide. "The combined company will have the technology, sales force and advertiser
customer base to be well positioned to compete in these highly competitive areas of advertising
and e-commerce on a global basis."
"This combination will create tremendous shareholder value for both Gemstar and TV Guide
shareholders," said Peter C. Boylan III, President & COO of TV Guide. "It answers the market's
desire for a complete resolution of the historical litigation, and permits the combined company to
focus on developing outstanding products which will better serve our partners, customers and end-
users".
The transaction is anticipated to close in the second half of next year and is subject to regulatory
approval.
Lazard Freres & Co LLC served as financial advisor to Gemstar and Merrill Lynch & Co. served
as TV Guide's financial advisor in this transaction.
Gemstar develops, markets and licenses proprietary technologies and systems aimed at making
technology user-friendly for consumers. Gemstar's technology and intellectual property are
licensed to major companies in the consumer electronics, satellite, cable and personal computer
industries, including Aiwa, Akai, America Online, Cox, Daewoo, Funai, GTE, Hitachi, Hughes
Network Systems, JVC, LG Electronics (Goldstar), Matsushita (Panasonic, Quasar), Microsoft
Corporation, Mitsubishi, Orion, Philips (Magnavox, Philips), Samsung, Sanyo, Scientific-Atlanta,
Sharp, Shintom, Sony, Southern New England Telephone, Thomson multimedia (GE, Proscan,
RCA, Thomson), Time Warner, Toshiba, Uniden and Zenith. Gemstar has 60 issued U.S. patents in
the general area of audio-visual technologies with over 1,000 claims and 70 foreign patents with
over 1,000 claims. The Company continues to pursue a worldwide patent prosecution program and
has more than 130 pending U.S. patent applications and over 160 pending foreign patent
applications.
Gemstar is a leading provider of electronic program guide services, which allow a user to view a
television program guide on screen, obtain details about a show, sort shows by themes or
categories, and select shows for tuning or recording, all through the remote control. In the United
States, data for Gemstar's electronic program guide services are carried on the ABC, FOX, CBS,
NBC, UPN and PBS networks by hundreds of over-the-air broadcast stations and on a number of
cable networks. Gemstar's electronic program guide has been built into a number of models of new
televisions, VCRs and TV/VCR combination units. Gemstar's electronic program guide is also
licensed to cable, telco and MMDS service providers, and has been integrated into direct
broadcast satellite receivers, digital and advanced analog cable set-top boxes, PCTV and other
Internet devices and computer operating systems such as Windows 98.
Gemstar's VCR Plus+ instant programming system is a world standard for VCR programming.
VCR Plus+ allows a user to record a television show simply by entering a number -- the
PlusCode(R) number -- printed in television program guides. The PlusCode numbers are published
by over 1,800 newspapers and television program guides worldwide, with a combined circulation
of over 330 million. The VCR Plus+ system has been licensed to virtually every major television
and VCR manufacturer and is now available in 40 countries and 6 continents, including the United
States, Canada, United Kingdom, Continental Europe, Japan, Southeast Asia, Australia, New
Zealand, South America and South Africa.
TV Guide, Inc. is a global diversified media and communications company that operates three
primary business units: TV Guide Entertainment Group, TV Guide Magazine Group, and United
Video Group. TV Guide markets and distributes products in the United States to over 100 million
cable and satellite homes every week. TV Guide also markets its products internationally in 44
countries. TV Guide magazine and TV Guide Channel are the largest print and electronic guidance
products in the world. TV Guide has unparalleled consumer reach with such products and
cable/satellite services as:
-- TV Guide -11 million circulation -34 million weekly readers
magazine
-- TV Guide -50 million subscribers -28 million weekly viewers
Channel
-- TV Guide -34 million homes passed -2.3 million subscribers
Interactive
-- TV Guide -37 million page views/month ->73,000 unique users per day
Online
-- The Cable -4 million subscribers -11 million weekly readers
Guide
-- Sneak Prevue -33 million subscribers
-- WGN -46 million subscribers
-- KTLA -3 million subscribers
-- WPIX -3 million subscribers
-- Denver 6 -4 million subscribers
Services
TV Guide operates several other business units including:
-- SpaceCom Systems - Television Games Network - SSDS
-- TV Guide Media Sales - TV Guide Affiliate Sales - TV Guide Enterprise
Solutions
-- TV Guide International - MMDI - Superstar Netlink
Group LLC
-- InfoMedia
For up to date information about TV Guide companies, please access the Company's Internet home
page at www.tvguideinc.com. TV Guide trades on the Nasdaq stock market under the symbol
TVGIA. An investor presentation may be downloaded from the TV Guide website referred to
above.
Except for historical information contained here, the matters discussed in this news release contain
forward-looking statements which involve risks and uncertainties, including the timely availability
and acceptance of new products, the impact of competitive products and pricing, the management
of growth, and the other risks detailed from time to time in the Company's SEC reports, including
the report on Form 10-K and 10-Q.
FOR MORE INFORMATION CONTACT: Pete Boylan or Craig Waggy 918-488-4000, or Henry
Yuen or Elsie Leung at 626-792-5700.
EDITORS: GUIDE Plus+, VCR Plus+ and PlusCode are registered trademarks of Gemstar. TV
Guide is a registered trademark of TV Guide, Inc. Other product names used herein are for
identification purposes only and may be trademarks of their respective companies.
SOURCE TV Guide, Inc.
/CONTACT: Pete Boylan, or Craig Waggy, both of TV Guide, Inc.,
918-488-4000; or Henry Yuen, or Elsie Leung, both of Gemstar International
Group Limited, 626-792-5700/
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 914041/
/Web site: tvguideinc.com |
