ReplayTV Will Cash Out

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SANTA CLARA, CALIF.-SONICblue Inc., which makes Rio MP3 audio players, agreed last week to buy personal video recording firm ReplayTV Inc. for about $123 million in stock.

The deal would allow SONICblue to expand into digital-video services, the buyer said said.

SONICblue said last Thursday it signed a letter of intent to issue 16 million shares, options and warrants of common stock-which closed Wednesday at $7.69 each-for full equity in ReplayTV. The PVR firm will become a wholly owned subsidiary of SONICblue.

The companies did not say when they expect the deal to close.

ReplayTV had already yielded the consumer-electronics side of the PVR business to rival TiVo Inc., declaring in December that it would refocus its efforts toward licensing technology to such infrastructure providers as cable MSOs and direct-broadcast satellite firms.

ReplayTV already had deals in place to conduct trials with Time Warner Cable, Comcast Corp. and AT&T Broadband. Charter Communications Inc., Motorola Inc. and ReplayTV said last October it would incorporate its PVR technology into a Motorola Broadband Communications Sector "DCT-5000" set-top, possibly in time for a trial in Charter cable homes this spring.

Last September, ReplayTV shelved plans for a $127.5 million initial public offering of about 19 percent equity in the company. Instead, ReplayTV, which was founded in 1997, will apparently be sold outright for a little less than that amount.