OpenTV shareholder objects to Kudelski's 'inadequate' offer

By Lisa Kerner

Charlotte, N.C., April 2 - OpenTV Corp. shareholder Discovery Group I, LLC believes Kudelski SA's $1.35-per-share offer for the company is "egregiously inadequate and oppressive."

"The offer fails to recognize the inherent value of the company and its promising future, as briefly demonstrated in 2008, the first full year of profitability in OpenTV's history," Discovery Group said in a letter sent to the company's board and included in a schedule 13D/A filed with the Securities and Exchange Commission on Thursday.

Discovery Group, an 11.4% shareholder, said it made a presentation to OpenTV's special committee that supports a fair value transaction of between $2.00 and $2.50 per share.

The shareholder said it was "disingenuous and self-serving" of Kudelski to meet with OpenTV shareholders and allege "that OpenTV's technology platform has been neglected and under-developed relative to its competition" as a means to "justify its low bid."

OpenTV's board has authorized over $160 million in research-and-development spending over the past five years, while Kudelski's offer values the entire San Francisco-based business at little more than $80 million, Discovery Group said in its letter.

Discovery Group said it also has reservations about the independence of OpenTV's special committee, because two of the three committee members were appointed to the board by Kudelski. In addition, one of them is a former career official with the government in Switzerland, which is where Kudelski is based.

OpenTV's software enables cable, satellite, telecommunications and digital terrestrial operators to offer enhanced television experiences to their viewers.

Kudelski is based in Cheseaux, Switzerland, and provides digital security and convergent media solutions for the delivery of digital and interactive content.

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