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CBS to Buy CNET: Activists Get Big Premium, Not Web-Savvy Management
Posted May 15, 2008 08:52am EDT by Aaron Task in Investing, Internet, Media, Venture Capital, M and A, IPOs, Morning Mashup
While Yahoo (and Microsoft) sharesholders await Carl Icahn's next move, tech M&A continues apace: CBS announced this morning it is buying CNET for $11.50 per share, a 44% premium over Tuesday's closing price.
The $1.8 billion deal for CNET, which runs sites such as CNET.com, ZDNet.com, and GameSpot.com, follows an intense fight over the firm between its management and activist shareholders, led by Jana Partners.
The activists, who have been waging a proxy fight intended to replace seven of CNET's eight board members, believe "CNET has not undertaken the ... type of fundamental strategic and operational changes needed to strengthen its core businesses and technology platform."
Jana's recent "white paper" on the subject criticized CNET's management and board as "lack[ing] the necessary sector experience and expertise" to bring CNET into the Web 2.0 world, noting their "backgrounds are primarily in traditional media or early-stage technology."
CBS, of course, is one of the ultimate traditional media companies, and "doesn't have much of a digital platform to date," writes Peter Kafka at Silicon Alley Insider.
Jana might not have gotten what it wanted in terms of management oversight of CNET, but a 44% premium is going to be hard to turn down on "principle."
2 Comments
Mo - Friday May 16, 2008 09:19AM EDT
for sure goldman sacks has a lot of oil stocks ,or they know somthings going on .
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Yahoo! Finance User - Thursday May 15, 2008 09:07AM EDT
Excellent news for Local.com (LOCM) and Marchex (MCHX). These are two hot companies that are growing fast, both old and new media will probably be fighting for them so should be interesting over the next months.