CBS pay £900m for CNET Networks
Agreed deal after hostile bid was rebuffed in new year
By Peter Sayer, IDG News Service | Published 14:37, 15 May 08
CBS has agreed to pay $1.8 billion (£900 million) in cash for online media company CNET Networks in a deal that has the backing of both companies' boards.
The acquisition will increase the total of unique monthly visitors to CBS Web sites to around 200 million worldwide, CBS said. CNET online brands include Silicon.com and ZDNet in the UK, CNET, GameSpot, TV.com, BNET, CHOW and TechRepublic.
CNET was the target of a hostile bid from investment fund Jana Partners in January. The investment fund, CNET's largest shareholder, sought to nominate two members to the company's board.
The CBS statement announcing the deal described CNET as profitable, but the company had a net loss of $6.1 million on revenue of $91.4 million in the first quarter. That was less than the $9.1 million the company lost in the year-earlier quarter, but the company's operating loss widened from $7.7 million in the first quarter of 2007 to $18 million this year, including restructuring charges of $5.1 million.
For the full year 2007, CNET's net income totaled $176.8 million -- including a $184.2 million income tax benefit.
CBS expects to close the deal in the third quarter. Its offer price of $11.50 per CNET share represents a premium of 45 percent over Wednesday night's closing price of $7.95. CNET shares were trading at $11.33 a half hour before markets opened Thursday morning.
