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Thursday, May 15, 2008

CBS to Purchase CNet for $1.8 Billion

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CBS is purchasing CNet Networks, Inc. for $1.8 billion in cash. CNet, an online news agency, stands to help CBS expand its Internet coverage and audience.

CNet shareholders will receive $11.50 per share, which is a 45% premium over CNet’s closing stock price yesterday. CNet had been at odds with one of its more substantial shareholders, which was advocating changes at the company during its stock slump.

Leslie Moonves, CEO of CBS, announced via a conference call that access to CNet’s online audience was a “large part” of the motivation behind the acquisition.

"Our idea is to have our content wherever, whenever you can get it, and adding CNet just makes that happen faster," Moonves said.

The CFO of CBS, Fred Reynolds, said the $1.8 billion acquisition price was "fair" and that CBS would see earnings increase immediately.

CBS will pay for CNet in cash from the company’s reserves.

CNet’s online properties include ZDNet, GameSpot.com, and TV.com. CBS’s Internet properties include CBS.com, CBSSports.com, and CBSNews.com.
The acquisition will close in the third quarter of 2008 following shareholder and regulatory approval.