Macrovision Agrees to Acquire Gemstar-TV Guide

Friday, December 7th, 2007 

Combined Companies to Revolutionize and Speed Delivery of Digital Home Entertainment Services

SANTA CLARA — Macrovision Corporation (NASDAQ: MVSN) and Gemstar-TV Guide International, Inc. (NASDAQ: GMST) today announced the two companies have signed a definitive agreement for Macrovision to acquire Gemstar-TV Guide in a cash and stock transaction. The aggregate value of the transaction to Gemstar-TV Guide stockholders, based on the closing price for the Macrovision stock on December 6, 2007, is approximately $2.8 billion.

Under the terms of the agreement, each share of Gemstar-TV Guide will be converted into the right to receive, at the election of each individual stockholder, subject to proration as detailed in the agreement, $6.35 in cash or 0.2548 of a share of common stock, in a new holding company that will own both Gemstar-TV Guide and Macrovision. The per share value of the transaction to Gemstar-TV Guide stockholders, based on the closing price of MVSN stock on December 6, 2007, represents a 29 percent premium to the 10 day average closing price of Gemstar TV Guide’s common stock prior to its review of strategic alternatives announced on July 9, 2007.

Macrovision stockholders will continue to own one share in the new company for each share of Macrovision common stock owned as of the closing. The aggregate cash consideration to Gemstar-TV Guide stockholders will not exceed approximately $1.55 billion. Upon completion of the transaction, the Macrovision stockholders will own approximately 53% of the combined company, and the former Gemstar-TV Guide stockholders will own approximately 47%. The transaction has been unanimously approved by the boards of directors of both companies and is currently expected to close by early second quarter 2008, subject to customary closing conditions.

Macrovision is a global leader in protection, enablement and distribution solutions that empower consumers to discover, acquire, manage and enjoy digital content. Gemstar-TV Guide is a global leader in video and entertainment guidance with products and services that deliver rich data and information to consumers over multiple media platforms. The combined company will be a leading enabler of the digital home entertainment experience and well-positioned to capture emerging opportunities across this exciting landscape.

Combining Macrovision’s and Gemstar-TV Guide’s solution portfolios will enable extensive libraries of commercial and personal protected content to be accessible on numerous devices through simple and intuitive guides. For example, consumers will be able to pull up a guide on their TV and receive personalized content and information regarding their favorite TV shows, read movie reviews before purchasing or renting a film, view personal photos, or tap into their music library.

Today that simple experience is prevented by interoperability barriers between devices and services. Macrovision’s and Gemstar-TV Guide’s strategic objectives have been to build and integrate open technology, content protection and distribution offerings that enable the delivery of digital media to consumers across multiple platforms and channels.

“Users today are demanding an open, easy to use and integrated set of capabilities that deliver on the promise of the digital home. This presents challenges to the content providers, distribution channels and device manufacturers as they struggle to quickly bring such offerings to market while preserving their unique value propositions,” commented Fred Amoroso, CEO and President of Macrovision Corporation. “We are now in a position to accelerate our vision by providing an enhanced combination of capabilities in support of the entire value chain, which is designed to deliver a differentiated solution for consumers.”

“This is a terrific transaction for our stockholders, giving them compelling value and a chance to participate in the opportunity to join forces with Macrovision to maximize value for all of our constituencies,” said Rich Battista, CEO of Gemstar-TV Guide. “We believe that the combined entity, with its complementary technologies, customers and global presence has the potential to redefine the consumer entertainment experience and drive significant additional stockholder value.”

The combination of Macrovision’s and Gemstar-TV Guide’s assets is intended to result in the integration of key ingredients needed to deliver on the digital home of the future, today. These include:

  • Guidance Technology – leading interactive program guide (IPG) technologies, intellectual property and an extensive customer base including: consumer electronics manufacturers, cable, satellite and IPTV operators, and mobile and online service providers.
  • Connected Services – tools and infrastructure for the delivery of content and related services directly to end users for the improvement of a home media environment both through enhancing the experience and providing content delivery. Current examples include MyTVGuide services (e.g., personalization, recommendations, ad serving, click stream analysis, notifications) and device registration. Future examples may include: video delivery service, Internet radio and music services.
  • Data Services – a broad set of metadata describing television shows, music, movies, and video games, including editorial content, relationships/cross references (e.g., this song was in that movie, this singer also sang for that group). Data services also encompass images, clips, and samples.
  • Connected Platform – technologies embedded into devices that enable interoperability with other media-aware devices, resulting in an open environment for secure distribution of digital media and content services, which support key open standards such as DLNA and UPnP.
  • Content Protection – key technology and intellectual property for protecting analog and digital standard and high-definition video content.
  • Consumer Sites – consumer facing websites providing users detailed and updated information on television, music, movie and games available.

Upon the close of this transaction, Fred Amoroso will be the President and Chief Executive Officer and James Budge, the Chief Financial Officer of Macrovision, will serve as Chief Financial Officer of the combined company. The new Board of Directors will be comprised of four members to be designated by Macrovision, and three members to be designated by Gemstar-TV Guide. Additionally, upon the close of this transaction, Gemstar-TV Guide CEO Rich Battista and CFO Bedi Singh will be leaving the organization.

The transaction requires, among other customary closing conditions, approval by two-thirds of the outstanding shares of Gemstar-TV Guide common stock, and a majority of the shares of Macrovision common stock voting at the special meetings to be held in connection with the transaction. News Corporation, which owns approximately 41% of the Gemstar-TV Guide common stock, has agreed to vote in favor of the transaction at the meeting of Gemstar-TV Guide stockholders to be held in connection with the proposed transaction, subject to the terms of a voting agreement.

This agreement concludes an extensive review by Gemstar-TV Guide of its strategic alternatives, including a broad solicitation of interest in the acquisition of Gemstar-TV Guide. Following this comprehensive process, Gemstar-TV Guide’s board of directors unanimously approved this transaction as the most effective alternative to maximize stockholder value.

JPMorgan served as financial advisor to Macrovision Corporation and UBS Investment Bank as financial advisor to Gemstar-TV Guide International on this transaction.