The Yankee Group may be predicting that TiVo won’t be around in 2010, but apparently, Citigroup doesn’t share the same dismal outlook. According to an 8K filing, TiVo announced that they’ve negotiated a new $50 million revolving line of credit with the bank. The line of credit will remain in effect until TiVo terminates the arrangement, violates the covenants or January 25th, 2010, whichever one comes first.
In the filing, TiVo indicated that they have the option of going back and requesting an additional $50 million be added to the line of credit if they needed it, but for the time being, they have no plans to borrow any of the money from the new loan. The line of credit replaces a $15 million loan with the Silicon Valley Bank that expired last September.
The terms and conditions on the loan impose standard debt restrictions in how TiVo can operate their business, but two notable features of the loan are the restrictions that could prevent TiVo from entering into certain M&A negotiations and the formula used for the interest rate calculation.
TiVo already has a poison pill in place, that all but ensures the company won’t be bought out in a hostile takeover scenario. To add to this, they also have language in both their Comcast and Cox agreements, that allow either company to terminate their cable deals, if TiVo is acquired by another company. While the inclusion of this type of language isn’t unusual for a loan of this nature, it existence is further proof that TiVo isn’t interested in selling the company, unless it’s on their terms.
