CNET Calls JANA’s Proposal ‘Improper’
CNet Networks responded to hedge fund JANA Partners’ aggressive proposal to takeover the company upon acquiring a majority of shares in the company. CNet called JANA’s proposal "improper" and indicated that a takeover would not add value for stockholders.
JANA Partners issued an announcement this morning and filed with the Securities and Exchange Commission its intent to submit proposals to amend CNet’s bylaws in order to increase the size of the board of directors from eight to thirteen. The move came after JANA acquired 21 percent, or a majority stake, in the company.
CNET responded with a statement that illustrates the company’s intent to fight against a takeover:
"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."
Time will tell if they’ll be able to do anything about it. Though CNET stresses that it is the ninth-largest Internet network in the world, the company has been a consistent loser over the past few years, dropping 19 percent of its value and over $16 million in the third quarter of 2007 alone.