TiVo shares fast-fowarded 20% this morning on a report that Rovi is preparing to offer cash and stock to buy the beleaguered DVR pioneer.

Image (1) Rovi_logo__111215185954-e1323975668771-200x122.jpg for post 302719The negotiations are “at a sensitive stage” and could fall apart, according to The New York Times, which first reported the story citing “people briefed on the talks.” The tentative plans, it says, would leave current TiVo owners with about 30% of the combined company.

With the jump in its stock price today, TiVo has a market value of nearly $885 million. Rovi is worth $1.6 billion.

TiVo shares have been falling lately — they’re down nearly 14% during the past 12 months — encouraging speculation that it was ripe for a sale. Its portfolio of DVR patents and intuitive user interface were seen as potentially valuable to current powers such as Comcast or new entrants in video such as Apple or Microsoft.

The DVR company has been struggling to find its place in the fast-changing video business. Its products have been too expensive for most viewers. Although they blend traditional cable or satellite video with Internet services such as Netflix, they can’t take advantage of two-way traditional pay TV services such as video on demand.

TiVo has been a vocal proponent of the FCC’s new efforts to open the set-top box market to independent manufacturers.

Under Tom Rogers, who stepped aside as CEO in January but remains chairman, TiVo offered its boxes to small and midsize cable companies looking for a relatively simple way to offer state-of-the-art services without huge infrastructure investments. He also led successful patent infringement suits against rival DVR providers including Dish Network, AT&T, Verizon and Motorola.

But the company didn’t have a clear next act with most of the suits resolved, and giants including Comcast and Charter focusing on their own set-top boxes — or cloud-based services that don’t require additional equipment.

Meanwhile, Rovi has established a following among TV viewers who want to access web video services including Netflix, Hulu and Sling TV. It also has licensing deals with AT&T’s DirecTV, Sony, Charter, Sharp and Vizio.