http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/ Engadget HD Comments for Is Dish considering swallowing TiVo's $7.5 billion poison pill? http://enghddev.weblogsinc.com/media/feedlogo.gif http://enghddev.weblogsinc.com en-us Copyright 2009 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/Jun 10th 2009 7:04PMhttp://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/Jun 10th 2009 7:26PMhttp://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/
TiVo sees itself as the winner of a fight and as a company owed a huge payoff by Echostar who they see as dragging out a court case they feel they were in the right over.

Dish sees TiVo as a holder of trivial patents that make it impossible to implement something without TiVo's consent.

Neither side are going to want to collaborate on anything.

There's a few ways around the poison pill BTW. One is for Echostar to work with other interested parties so 51% of the shares are owned by companies who want TiVo closed down, but of which none own more than 14% of the company. That's a stretch.

Another is to challenge the poison pill in court, as they're not generally seen as 100% kosher.

And finally, they can call TiVo's bluff, buy 15% of TiVo, let it go bankrupt, and bid for the assets, which should be considerably less than $7.5B. The assumption TiVo and the author makes is that any hostile takeover would be by a company that wants TiVo in some viable state. If all you're trying to do is destroy the company, a poison pill actually works to your advantage.
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You are right about finding five other parties who are willing sellers though which is why I mention the possibility of killing the pill in the post. The problem with this is though, that you have to have been a shareholder prior to the judgement in order to vote. While there were a lot of people who sold their shares post judgement, anyone who held prior to judgement is likely a long time TiVo owner and one that probably isn't so fond of Dish. If you didn't like Dish and had already sold your shares would you vote to make it easier for them to strip out the poison pill? I doubt it. Dish could try again in a year or wait 2 years for it to expire, but that's assuming that they can litigate that long.]]>Jun 10th 2009 7:53PMhttp://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/
Issuing a $60 a share dividend forces up the share price and leaves TiVo oweing $7.5B to its shareholders, making a takeover phenomenally expensive. That's what makes it a poison pill.]]>Jun 10th 2009 8:02PMhttp://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/Jun 10th 2009 8:01PMhttp://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/
Wait....did me slacking off at work cause all of this speculation?]]>Jun 11th 2009 4:43PMhttp://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/
"If a person becomes an Acquiring Person, each Right will entitle its holder to purchase, at the Right's then-current exercise price, a number of common shares of TiVo having a market value at that time of twice the Right's exercise price. Rights held by the Acquiring Person will become void and will not be exercisable to purchase shares at the bargain purchase price. With limited exceptions, an Acquiring Person is defined as a person who acquires 15% or more of the outstanding common stock of TiVo. If TiVo is acquired in a merger or other business combination transaction which has not been approved by the Board of Directors, each Right will entitle its holder to purchase, at the Right's then- current exercise price, a number of the acquiring company's common shares having a market value at that time of twice the Right's exercise price."]]>Jun 10th 2009 8:13PMhttp://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/
That is the classic formulation of a pill - contains both flip-in and flip-over features. Delaware courts will usually uphold the adoption of a poison pill under the business judgment rule.]]>Jun 10th 2009 8:53PMhttp://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/Jun 11th 2009 10:04AMhttp://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/Jun 11th 2009 11:25AMhttp://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/http://enghddev.weblogsinc.com/2009/06/10/is-dish-considering-swallowing-tivos-7-5-billion-poison-pill/Jun 11th 2009 11:16AM