Discovery: OpenTV should buy out Kudelski

Discovery Group, the largest independent shareholder of OpenTV, has sent a letter to the Board of Directors proposing that OpenTV offer to repurchase Kudelski Group's 32 per cent economic stake for $1.35 per share.

Discovery's recommendation follows Kudelski's failed attempt to take full ownership of OpenTV.

Discovery points to recent disclosures by Kudelski that suggest that its primary ambition is to access cash at OpenTV, amounting to $114.2 million in order to pursue large-scale acquisitions. Because Discovery believes these acquisitions would not serve the best interests of OpenTV's US shareholders, which hold a majority economic stake of 68 per cent, Discovery suggests that a better alternative would be for OpenTV to use about half its available cash to buy-out Kudelski for approximately $60 million.

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