CBS President Leslie Moonves Drops By CNET HQ

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CBS President & CEO Leslie Moonves paid a visit to CNET headquarters in San Francisco today, we’re hearing.

He came alone. No Quincy Smith, No Michael Marquez (the guys who did the deal). No entourage of any kind. The goal? Address the troops (all of CNET, in person and via a webcast) and let everyone know how this $1.8 billion merger is going to play out.

The main message: CNET is now the cornerstone (or one of the cornerstones of CBS’ online strategy. Neil Ashe, CNET’s CEO, will report to Smith, and CBS Interactive’s various properties (such as Last.fm, CBSSports.com, etc.) will all become one big family, moving traffic and leveraging “deep relationships with big advertisers (auto, pharma, tech, etc.).” Expect lots of interaction points between the the TV and online properties.

Will they succeed in their grand integration plan? First they have to close the merger, which isn’t a done deal. This was a hurried negotiaton, in reaction to the looming threat from a activist shareholder group, led by Jana Partners, with ambitious goals of overhauling the company.

CNET signed a confidentiality agreement with CBS on May 7, according to the merger agreement (Section 8.02(c)), just one week before the deal was announced. CNET’s investment bank, Morgan Stanley, certainly didn’t shop the deal much to other likely buyers before CNET signed.

Other bidders may still come to the table. And if they bid more, CNET has to pay a relatively paltry $35 million breakup fee (good analysis of this here). Perhaps now that CNET is engaged, other suitors (see Microsoft) may suddenly find it a lot more attractive than it was a couple of months ago.

Still, all signs are positive for CNET right now. The merger price, which works out to $11.50/share, is, coincidentally, $.50/share more than Jana Partners said they could expect to get for the company by 2009. So the only question left is, does anyone want CNET more than CBS does?

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