JANA Partners Buy 10% of CNET; Advocates Board Shuffling

Posted Jan 9, 2008

The trials and tribulations of a public Internet company is especially shown by the recent occurences around CNET Networks, Inc.  Here you have a company valued at $1.3 billion, trading at about $8.40 per share and on the other side you have investors that just bought 10.5% voting stock of the Internet company that wants to see some change.  JANA Partners upped their stake in CNET to 10.5% from a previous 8.1%. 

The Company carefully reviewed JANA Partners’ proposal and determined that it is improper under the Company’s by-laws. CNET Networks’ governance processes and by-laws are intended to enable all stockholders having a legitimate interest in enhancing the Company’s value over time to submit proposals, and to prevent short-term stockholders without standing from using the Company’s established governance procedures in order to further their individual agenda. Furthermore, the Company believes that no person or group of persons should be able to gain a majority of the Board and control of the Company without offering sufficient value to all stockholders.

CNET Networks Inc. press release [via paidContent]

JANA responded by saying that CNET’s statement was a misrepresentation.  JANA wants to recruit highly qualified board members to increase the long-term value of the company for stockholders.

The current CEO of CNET is Neil Ashe and today he gave a presentation at the Citigroup Global Entertainment, Media & Telecommunications Conference.  Some of the discussion that took place at the presentation can be found at paidContent.