CNET-CBS: Making The Case To The CNET Troops; Not Sure About CNET Networks Brand
Yesterday CNET (NSDQ: CNET) CFO Zander Lurie pitched the company’s sale to investors, but really, how hard is it to justify a deal that delivered a 45 percent premium? Today is the day that the case is being made to employees, though we’ve heard and read elsewhere that CNET employees are by and large into the deal. This afternoon CBS (NYSE: CBS) CEO Leslie Moonves will be getting a tour of the SF headquarters, and there will be a company-wide phone-in address (we’ll let you know what we hear). In advance of that, CNET has filed what’s basically an employee FAQ with the SEC covering various topics on things like health benefits and strategy. Some of the questions have been addressed already. Here are some highlights:
—Are there duplications between our organization/roles and their organization/roles? Can we expect layoffs as a result of the acquisition?: CNET Networks’ employees were a major factor in CBS’s decision to acquire us. As we work through the integration process, we will look at where roles and responsibilities may overlap and determine how to best utilize our employees’ skills and expertise in the combined organization. Through this process, we will also determine if we need to make changes to the organization.
—Does this announcement impact the recent Yahoo (NSDQ: YHOO) announcement? If so, how?: We are committed to launching our Yahoo partnership on July 1st. We view this news as an opportunity to potentially expand the Y! relationship across CBS Interactive brands.
—Does CBS have plans to merge, close or sell any brands?: As part of the integration process, we will work closely with our partners to determine how to take advantage of our assets across both organizations.
—Will we keep the CNET Networks name?: At this time we don’t know.
—If we own stock options, what happens now?: In the merger, each in-the-money option (i.e., an option with an exercise price less than $11.50), whether vested or unvested, will be cancelled in exchange for a cash payment equal to the number of options multiplied by the “spread” between $11.50 and the exercise price (minus any applicable withholding tax). In other words, each in-the-money option, vested or unvested, will be “cashed out” at the closing of the merger. Under the merger agreement, each out-of-the-money options (i.e., option with an exercise price equal to or greater than $11.50) will be exchanged for an option for CBS shares of equal value with substantially the same terms as the original CNET Networks option (including vesting provisions).
Related StoriesPosted In: Money, M&A & Venture Capital, Mergers & Acquisitions, Companies, CBS, CBS Interactive, CNET
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Comments (6)
May 20, 2008 10:34 AM
This is obviously a superficial post. The CNET resumes are already hitting the street. We’ve seen them flying around the web already. No serious Internet person at CNET wants to or will work for CBS for very long. They will do what they always do: collect their money when the deal closes and move onto the next start-up that has promise.
May 20, 2008 1:02 PM
First off you guys have done a great job of covering this story.
My reaction when all of this news came out was to be scared that it would turn out to be like what happened to TechTV when they were bought by Comcast. I was told by someone that went through that merger and now is a CNETer that “this feels a lot different” so my fears were lowered a little bit. This article is beginning to make me wonder if my fears were indeed justified. As I was told by the CNETer “Who know what will happen?”
May 20, 2008 2:13 PM
Jenkins is right. We’re already seeing CNET folks out looking for a new gig.
May 20, 2008 5:03 PM
If they are looking to work elsewhere before they know what changes are going to be made, then those are people who are frightened of change full stop and exist in every large company. Not a way to judge at this stage, Jenkins.
May 20, 2008 9:27 PM
It’s all about money. CBS doesn’t have a growing stock so they can’t possibly keep the serious Internet folk. No options = no killer Internet people.
May 21, 2008 12:00 PM
If options are the incentive, most people would have left CNET long ago. No one will leave until in the money options are cashed out. That would be crazy. Long term, the people left at cnet are more builders than entrepreneurs. The entrepreneurs are spread out across the internet - CNET DNA is everywhere….