CBS Buys CNET for $1.8B … JANA’s Mum

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marriage.jpgADOTAS – In a bid to expand its presence online and garner $1 billion in interactive revenue by 2010, CBS Corp. announced that it bought CNET in an all-cash $1.8 billion deal, amounting to roughly $11.50 a share (CNET closed at $7.95 a share last night, representing a 45% premium).

Though some are still scraping their jaws off the floor at the hefty price, CBS’s CFO Fred Reynolds called the price “fair” in a conference call with reporters. CBS plans to combine their advertising platforms and study them to figure out which systems are the most profitable and oust the under-performers.

“There are very few opportunities to acquire a profitable, growing, well-managed Internet company like CNET Networks,” Leslie Moonves, CBS’s chief, said in a press release today. “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.”

Despite Moonves’ Pollyannaish outlook on CNET’s profitability, the fact is, CNET’s shares have been tanking for years – they’ve been down 21%, 52% and 25% in the one, two and three-year periods ending March 28 – raising the ire of investors.

In April, JANA partners, leading a group of activist investors, launched a plan to take control of CNET’s board and released a 38-page white paper that outlined its plan to bolster CNET’s faltering earnings and letting loose a devastating attack on CNET’s chief, Neil Ashe and its CFO, Zander Lurie.

Jana’s solution to CNET’s ills? Increasing earnings by selling interactive advertisements, building social networking features on its sites and highlighting CNET’s listings in search results online.

No word yet on JANA’s reaction to the sale.

CNET’s board unanimously approved the merger and recommended CNET stockholders (ahem, JANA!) to accept the tender offer and tender their shares. The deal is expected to be completed in the third quarter of this year.

CNET’s shares were trading at $11.43, up 3.48% as of 11:05 a.m., while CBS’s were trading at $23.86, down 3.96%.

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