12/07/2007 1:00AM

TVG's owner purchased

EmailMacrovision Inc., which sells products to prevent unauthorized reproduction of media content, has reached a deal to buy Gemstar-TV Guide, the parent company of Television Games Network, for $2.8 billion in cash and stock, the companies announced on Friday.

The impact of the deal is unclear for TVG, which Gemstar has been shopping for much of this year. TVG is the largest domestic account-wagering operation and horse racing network in the United States, but its value is hard to determine because of uncertainty over whether the company will retain the in-home broadcast and wagering rights to the signals controlled by the New York Racing Association. The rights expire at the end of this year, as does NYRA's franchise to run racing at New York's three largest racetracks.

Investors reacted negatively to the deal's announcement. Stock in Macrovision declined $5.55 to $25.99, or 21.4 percent, on Friday, while shares in Gemstar closed at $5.98, down 99 cents, or 16.6 percent.

The deal has been approved by the board of directors of both companies and is expected to close early in the second quarter of 2008, the companies said. Gemstar has a market capitalization of $2.6 billion, considerably larger than Macrovision's $1.4 billion market capitalization.

In addition to owning TVG, which is a minor component of its overall business, Gemstar-TV Guide produces TV Guide magazine and other programming guides, but competition for cable listings has exploded over the past decade. Macrovision intends to combine its technology protecting media with Gemstar's business in order to give users control of their media libraries through interactive television features, the company said.