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Class action writs are not unusual in the US, and it seems at least one group of TiVo shareholders feel aggrieved by the recent agreement for Rovi to acquire TiVo.
Brodsky & Smith – class action veterans – say they are gathering potential evidence that the Board of Directors may have breached their fiduciary duties and might have violated State rules. Another legal firm, Levi & Korsinsky is also seeking willing TiVo shareholders, saying the Directors may have ‘failed to adequately shop the company before agreeing to enter into this transaction”.
The headline numbers see Rovi buying TiVo in a $1.1 billion deal.
Brodsky & Smith says: “Under the terms of the transaction, TiVo shareholders will receive only $10.70 in cash and stock for each share of TiVo stock they own. Rovi will pay $2.75 in cash, subject to a collar mechanism, and the remainder will be paid in shares of common stock of a holding company that will own both Rovi and TiVo. [Our] investigation concerns whether the Board of TiVo breached their fiduciary duties to shareholders and whether Rovi is underpaying for the Company. The transaction may undervalue the Company and would result in a loss for many TiVo shareholders. For example, TiVo stock traded at $11.56 per share on March 15, 2015 and an analyst has set an $18.00 per share price target for TiVo stock.”