CBS Acquiring CNET For $1.8 Billion; 44.6 Percent Premium

13 Comments

imageCBS (NYSE: CBS) is acquiring CNET (NSDQ: CNET) for $1.8 billion in cash. The purchase price comes to $11.50 per share, representing a 44.6 percent premium over last night’s closing price of $7.95. This is that big acquisition we’ve been waiting for from Quincy Smith’s CBS Interactive, and from CNET’s perspective, this avoids the proxy drama with Jana — it appears that this represents a nice profit for them, but the firm, we’re told, has no comment tyet, and is looking into it. The deal was approved unanimously by the CNET board and is expected to close in Q3. Release. (Read our exclusive interview with CBS CEO Leslie Moonves.)

Said CBS CEO Les Moonves in the statement: “CBS stands for premium content and unparalleled reach, and CNET Networks will add a tremendous platform to extend our complementary entertainment, news, sports, music and information content to a whole new global audience. Together, CBS and CNET Networks will have significant additional exposure to the fastest- growing advertising sector and can accelerate our growth through a number of new content, promotion and advertising initiatives. We could not be more pleased with the prospect of adding CNET Networks and its tremendous team of people to the CBS family. I look forward to working with Quincy Smith, Neil Ashe and the considerable combined talent at both companies, as we build upon our success.”

Among the sites in the CNET family that will be part of CBS Interactive pending approval: CNET, ZDNet, GameSpot.com, TV.com, mp3.com, CNET news.com, UrbanBaby, CHOW, Search.com, BNET, MySimon and TechRepublic. The company has also been building out its China operations, with sites devoted to womens content and auto.

Rumors of a coming CNET acquisition have been bandied about for many years — it almost became a boring old joke, the equivalent of yelling Freebird at a rock concert. It’s not clear from the release what will happen to CNET’s management. A statement from Neil Ashe is vague on this: “CNET Networks operates some of the most important premium online brands, serving the most sought after online audiences. Today’s announcement brings together two organizations that complement each other and working with Leslie, Quincy and the talented people at CBS, we look forward to taking our business and our brands to the next level.” A conference call will be held at 8:30, so we’ll learn what we can then.

13 Comments

Newark Media

Personally, I had thought CNET would go for at least $2B. Agree with Charles– I really like CNET & hope CBS doesn't ruin it.

Granville Ohio Business

CNET is such an interesting choice for CBS. And 1.8 billion– wow. I can't wait for the first network to really tie the online play with television. It always seems so disjointed.

charles.

They should have tested the market futures, the current situation and number of internet users, the expected users in 2 years etc. A good research will mean a good acquisition but i have heard that jana partners wanted to acquire Cnet Networks, inc. too so i think this is a rushed deal to prevent Jana Partners from acquiring executive position in Cnet Networks Inc.

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Michael

I just really hope that CBS doesn't ruin CNET. News.com is one of the best sources for technology news and reviews, it getting all mucked up by CBS would be a terrible shame.

Adi

As a long time CNET shareholder, I think this is a good deal for CNET.

They have terrific talent and excellent position in the marketplace, with a lot of known web-sites and podcast/Tivo distribution, among other things.

And hopefully CBS will come in and clean up the management woes that are happening there.

Positive Dennis

It seems to me that pason and jelado are talking about two different things. The fact that I like Cnet as a consumer of thier product does not mean I want to own the stock.

Breno Machado

Breno, a CBS esta comprando talentos e endereços no Broadband. Abraço,
João Braz.

pason

CNET is a declining asset. Strip out revenue from acquisitions from the past 18 months and there's almost no organic growth. Their bottomline is a joke relative to their top line revenues. Stick to the facts. The facts are that CNET has seen better days which is why JANA was fighting them so hard. They have been failing in the marketplace.

jelado

"pason" is a moron. cnet happens to be a terrific franchise. then agaon, "pason" is a nose picker w/o an understanding of the internet or publishing. suck eggs

pason

good to see CBS buying one of the declining Internet assets — yipee!

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