Squiggles, you should go back and read the poison pill. If Dish tries to "shut TiVo down" by acquiring more than 15%, TiVo shareholders would have the right to assume 65% control over EchoStar based on their current market cap. In other words, triggering the pill would get Dish management fired not TiVo.
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.
Davis - where are you reading that? All I've read is that buying 15% of TiVo would immediately result in TiVo issuing a $60 per share dividend to all of their shareholders. What you're proposing isn't in anything I'm reading, and frankly, I don't see how an arrangement could be legally binding on anyone.
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.
Reader Comments (Page 1 of 1)
Davis Freeberg @ Jun 10th 2009 7:53PM
Squiggles, you should go back and read the poison pill. If Dish tries to "shut TiVo down" by acquiring more than 15%, TiVo shareholders would have the right to assume 65% control over EchoStar based on their current market cap. In other words, triggering the pill would get Dish management fired not TiVo.
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.
squiggleslash @ Jun 10th 2009 8:02PM
Davis - where are you reading that? All I've read is that buying 15% of TiVo would immediately result in TiVo issuing a $60 per share dividend to all of their shareholders. What you're proposing isn't in anything I'm reading, and frankly, I don't see how an arrangement could be legally binding on anyone.
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.