Status Report: Gemstar/TV Guide-Macrovision Merger

According to GMST, the HSR notification for this transaction was filed on December 31, 2007. The waiting period expiration date is therefore January 30, 2008. As discussed initially, there are no issues of competition associated with this combination, so early termination is likely to be granted shortly.

GMST claims the initial proxy statement is essentially completed and on target to be filed with the SEC before the end of January. The SEC review is also no expected to be problematic or lengthy for this deal, so if the first proxy is indeed filed within the next two weeks, the GMST shareholder meeting can be expected in a late-March / early-April time frame.

Of most importance, the first sign of shareholder opposition surfaced yesterday when Loeb Partners announced it would vote is 2.1% holdings in GMST against the merger. Not surprisingly, Loeb is citing lack of rationale for the combination, as opposed to concerns about the current terms of the transaction.

Given that this merger is truly perplexing from a rationale standpoint, additional shareholder opposition can be expected over the course of the next two months leading to the GMST shareholder meeting. It is too early in the process to suggest that shareholder opposition may actually threaten this deal, but it must be acknowledged that this situation presents a high potential for shareholders ultimately voting against the combination.