TiVo is in “advanced negotiations” to be sold to Rovi, The New York Times reported, citing unnamed people who have been briefed on those discussions.
According to the report, shareholders of TiVo would receive a combination of cash and stock, though the price is still being negotiated. Post-deal, TiVo shareholders would “probably own about 30 percent of the combined company,” the paper said, citing people familiar with the talks. The story also said the negotiations were at a "sensitive stage and it is still possible a deal could falter."
TiVo declined to comment on the story. "We do not comment on rumors in the marketplace regarding speculation of possible M&A transactions or otherwise," Rovi said in a statement.
TiVo shares surged $1.58 (20.63%), to $9.24 each, in morning trading Thursday in the wake of the report. Rovi shares were up 25 cents (1.25%), to $20.32.
Report of those merger talks come amid changes at TiVo, a DVR pioneer, supplier of data analytics, and maker of video recommendation and search products via its Digitalsmiths unit. Last month, TiVo moved ahead on a restructuring that impacted about 50 full-time employees as the company puts a greater emphasis on MVPD partnerships and reduced spending tied to its retail product strategy.
TiVo sells DVRs at retail and through its MVPD partnerships (TiVo ended its fiscal Q4 with 6.8 million subs – 5.47 million via MSO partnerships and 971,000 that are “TiVo-owned” via retail), but it also focuses heavily on user interfaces, apps and video software – products and product components that are competitive to Rovi, but could likewise fit within areas of Rovi’s existing technology portfolio, which now includes Fan TV, the video software (and former maker of IP streaming set-tops) that Rovi acquired in 2014.
Both companies also have a history of filing lawsuits fueled by their respective pools of patents and intellectual property. Of recent note, TiVo fired a lawsuit at Samsung claiming that the CE giant was infringing on four patents that have been litigated previously. TiVo has since settled lawsuits against Motorola Mobility (formerly part of Google) and Cisco Systems, as well as Time Warner Cable, Dish Network, AT&T and Verizon Communications.