Xperi Gets $1.2B Takeover Proposal From Former CEO

Xperi Corp. said it has received an unsolicited takeover proposal from a consortium led by its former chief executive officer, posing a potential challenge to its merger with TiVo Corp.

Bloomberg reports Metis Ventures LLC, where former Xperi CEO Tom Lacey is a managing member, proposed an all-cash bid of $23.30 a share for all outstanding Xperi shares, according to a statement on Sunday. The offer represents a 20% premium over Xperi’s closing price on Friday and values the company at almost $1.2 billion.

Xperi said it will not be engaging in discussions with Metis Ventures and reiterates its “continued support and enthusiasm” for the pending transaction with TiVo.

Tom Lacey

“Based on the current non-binding terms and conditions, as well as lack of information, it is unable to conclude at this time that Metis Ventures’ non-binding proposal is reasonably likely to lead to a superior proposal under the terms of Xperi’s merger agreement with TiVo,” Xperi said in the statement.

Metis has obtained a commitment letter for $1.5 billion in debt financing from an entity in Luxembourg owned by London-based Method Investments & Advisory Ltd.

The proposal is intended to break up the merger between Xperi and TiVo, the inventor of the digital video recorder, which would give TiVo shareholders a controlling stake in the combined company. That deal is slated to close in the second quarter, according to a statement this month.

Xperi and TiVo agreed to an all-stock merger in December in a deal that would give the combined company an equity value of $2.4 billion. The combined company would be run by Xperi Chief Executive Officer Jon Kirchner, who assumed the top job after Lacey retired in 2017.

Xperi, based in San Jose, California, licenses software that is used for playing back high-definition sounds on consumer electronics, as well as imaging software that enables mobile-phone cameras to recognize faces, according to its website. Its customers include SK Hynix Inc. and Intel Corp. which accounted for about 28% of its revenue in 2019, its annual report shows.