CBS to buy CNET Networks for US$1.8 billion
- 15 May, 2008 22:00
CBS has agreed to pay US$1.8 billion 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 websites to around 200 million worldwide, CBS said. CNET online brands include CNET, GameSpot, TV.com, BNET, CHOW, ZDNet 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 US$6.1 million on revenue of US$91.4 million in the first quarter. That was less than the US$9.1 million the company lost in the year-earlier quarter, but the company's operating loss widened from US$7.7 million in the first quarter of 2007 to US$18 million this year, including restructuring charges of US$5.1 million.
For the full year 2007, CNET's net income totaled US$176.8 million -- including a US$184.2 million income tax benefit.
CBS expects to close the deal in the third quarter. Its offer price of US$11.50 per CNET share represents a premium of 45% over Wednesday night's closing price of US$7.95. CNET shares were trading at US$11.33 a half hour before markets opened Thursday morning.