Gemstar-TV Guide investor supports sale, cautions board to keep future equity in mind

By Lisa Kerner

Charlotte, N.C., July 19 - Gemstar-TV Guide International Inc. shareholders led by Citadel Equity Fund Ltd. offered public support for the board's decision to pursue strategic alternatives for the company.

"We have been particularly impressed with the management team chief executive officer Rich Battista has assembled and the strategic direction this leadership has brought to the company," the investor said in a letter to Gemstar-TV Guide's board and included as part of a schedule 13D filing with the Securities and Exchange Commission.

According to Citadel, Gemstar-TV Guide is "at the nexus of exciting changes taking place in video entertainment consumption" and the company has "the potential to realize several billion dollars of incremental equity value over the next years."

However, Citadel does not believe "the current market value of Gemstar-TV Guide common stock comes close to reflecting either 1) the current improved state of Gemstar-TV Guide's operations or 2) the opportunity for independent value creation over the next several years as an increasing number of platforms take advantage of Gemstar-TV Guide's unique intellectual property."

The investor supports a sale of Gemstar-TV Guide that would "adequately compensate all shareholders for the immense opportunity that lies before Gemstar-TV Guide."

As previously reported, Gemstar-TV Guide said it will explore strategic alternatives, including a possible sale of the company, with the assistance of UBS Investment Bank and Wachtell, Lipton, Rosen & Katz.

Citadel beneficially owns 35,830,834 shares, or 8.4%, of the Los Angeles media, entertainment and technology company's outstanding stock.

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