CBS and CNET: Stealth courtship revealed!

Moonvesupfront2008_2Some interesting tidbits in today’s SEC filings from CBS Corp. and CNET Networks on the commencement of CBS Corp.’s tender offer to buy CNET Networks for about $1.8 billion.

Most interesting is the detail offered in the backgrounder on the negotiations, which only reinforces how astounding it is that not one whiff of CBS’ pursuit of CNET got out in the press prior to the deal announcement on May 15.

CBS Corp. boss Leslie Moonves and CBS chief financial offer Fredric Reynolds made several treks during the past year to CNET’s San Francisco HQ to meet with their counterparts, CNET CEO Neil Ashe and CFO Zander Lurie. Ashe and Lurie also spent a lot of quality time at Black Rock meeting with CBS brass. We also now know that May 14 was a marathon workday for Moonves. Not only was it the day of the Eye’s upfront presentation at Carnegie Hall, but the final-final the paperwork on the CNET deal was hammered out that day and night and into the wee hours of May 15 prior to the PR execs for both companies pushing the “send” button on the press release that morning.

The big question now, of course, is whether another suitor will come forth with a higher offer for CNET during the next month or so during the tender offer period. Some have suggested that CBS overpaid in agreeing to a deal that gives CNET a 45% premium over where its stock price was before the deal was announced.

But the CBS response is pretty persuasive. CNET is no Internet pipe dream. It’s a real company and web pioneer that survived the first dot-bomb meltdown. For 2008, CNET is forecasting nearly $93 million in earnings on revenues of $446 million. Those are numbers that even a $14 billion company like CBS can’t sniff at.

As recounted in this SEC filing (the interesting stuff starts on page 15) Reynolds, intrepid CBS Interactive prexy Quincy Smith and two other CBS execs made the first fact-finding mission to CNET’s offices in April 2007. Then Moonves and Ashe made a point of having dinner in July during investment banker titan Herbert Allen’s annual moguls’ retreat in Sun Valley, Idaho. (Allen & Co. wound up becoming an adviser to CNET on the deal.)

(Pictured above: Leslive Moonves on stage at Carnegie Hall during the Eye’s May 14 upfront presentation. He headed back Black Rock later in the day to monitor the last lap of the CNET negotiations.)

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