Hughes Electronics Corp.'s DirecTV, the biggest U.S. satellite-television service, agreed Tuesday to use Gemstar-TV Guide International Inc.'s technology for its on-screen program guide.
Gemstar shares rose 60 cents to $5.10 in extended trading after the agreement was announced. Earlier, the shares fell 3 cents to $4.50 on Nasdaq. Gemstar has risen 38% this year.
Hughes, based in El Segundo, will license Gemstar's technology now that it is coming under the same ownership as Los Angeles-based Gemstar. Rupert Murdoch's News Corp. has agreed to buy a 34% stake in Hughes for $6.6 billion in cash and stock. Sydney-based News Corp. also owns 43% of Gemstar.
Hughes spokesman Bob Marsocci said the sale to News Corp. and the licensing agreement with Gemstar were coincidental. Hughes and Gemstar have held occasional negotiations over the last several years, he said.
Hughes shares rose 17 cents to $16.43 on the New York Stock Exchange. News Corp.'s American depositary receipts fell 27 cents to $34.13.
DirecTV also will pay Gemstar for the right to use its TV Guide magazine brand name on its program guide, the two companies said. The agreement starts next year.
Under the terms of the deal, Gemstar will no longer collect some licensing fees from Philips Electronics North America Corp., Sony Corp. and Thomson, Gemstar spokeswoman Christine Levesque said. Those companies currently pay Gemstar a licensing fee to provide television set-top boxes to DirecTV that include Gemstar's technology.
Other terms weren't disclosed.