Rovi Could Owe TiVo $36.6M if Deal Crumbles

SEC filing reveals variable break-up fee (Updated)
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Rovi and TiVo expect to wrap up their proposed $1.1 billion merger in the third quarter of this year, but it could be costly to Rovi if the merger somehow falls through.

A 10-Q filed Friday by Rovi noted that Rovi could be on the hook, under certain scenarios, to pay TiVo a termination fee of $36.6 million, or $9.2 million, “depending on the specific circumstances.” Rovi’s filing did not detail the specific circumstances that would cause the fee to be on one side of the scale or the other.

“These provisions might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of Rovi from considering or proposing an acquisition or might result in a potential competing acquirer proposing to pay a lower price per share to acquire Rovi than it might otherwise have been willing to pay,” the company explained.

Among other associated risks, Rovi noted that it will be exposed to certain costs tied to the deal, whether or not it’s completed, such as “significant” fees and expenses related to legal, accounting, financial advisors, and printing.

Update: TiVo shares closed Friday (April 29) at $9.98 each, up 56 cents (5.94%); Rovi shares closed at $17.62 each, up 27 cents (1.56%). 

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