Gemstar-TV Guide International Inc (NASDAQ: GMST) is on the block. The company, whose holdings include the TV Guide magazine and cable channel, and which has patents on electronic television program guides, announced that its board of directors authorized the company to explore strategic alternatives, a move that could lead to the breakup of the company. Gemstar added that it has hired UBS as its financial advisor.

Rupert Murdoch's News Corporation (NYSE: NWS), which has a 41% stake in Gemstar, said yesterday that it supported the company's decision. Why wouldn't it? As the Wall Street Journal aptly put it, a sale of Gemstar could allow News Corp a way to sell its interest in the company. News Corp invested in Gemstar indirectly in 2002, having acquired it from a series of deals that began with its sale of TV Guide magazine to an affiliate of Tele-Communications Inc. TCI later merged with Gemstar. Of course, the deal has not been a pretty one, as Gemstar's management and accounting practices were later probed by the SEC. Former CEO Henry Yuen pleaded guilty to obstruction of justice in 2005, and was ordered to pay $22.3M for inflating revenue between 2000 and 2002. News Corp. may also be looking to get out of Gemstar because of Gemstar's desire to put more focus on its video patents, an area which News Corp is not "seeking to increase its presence."

The company has, however, done a pretty good job at reversing its luck. With new management, the company increased its revenue by about 9% in Q1 and increased its net income by nearly 30% last year. Earlier this year, the company acquired Aptiv Digital to move further into the interactive program-guide market, after seeing its print magazine floundering. Although GARP Research analyst George Sakellaris didn't name specific suitors, he believes that they are "plentiful." Aside from its patents and other revenue streams that include advertising on its interactive programming guides, the company has long-term contracts with major cable and satellite providers in the U.S. and elsewhere. Additionally, the company has seen improved earnings, a benefit of increasing demand for its electronic television guide, and has little debt. Its vast collection of assets could easily be picked up by another company, and sources in the market are speculating that a private-equity buyer, traditional media company or cable operator may be interested in its patents, TV Guide magazine or cable channels.

So far, so good. Gemstar shares shot up nearly 15% yesterday in after-hours trading.