Jana, Sandell Launch Offensive Against CNET

Jan 7 2008 | 1:11pm ET

Annoyed by its poor stock performance, activist hedge fund manager Jana Partners today launched a bid to take control of Internet media group CNET Networks.

The New York-based firm, backed by fellow hedge fund Sandell Asset Management, said it plans to nominate a pair of candidates to challenge the two CNET board members up for reelection at the company’s next annual meeting. It also plans a push to add five seats to the CNET’s board—which currently numbers eight directors—in an effort to gain control.

Jana complains that CNET’s performance is not up to snuff, pointing both to a 19% decline in stock price between 2005 and last year, as well as last year’s less than 1% return. The hedge fund owns an 8% voting stake and a similarly-sized non-voting stake in the company. Sandell owns a 5% non-voting stake in CNET.

San Francisco-based CNET quickly responded to Jana’s intrigues, calling its proposal “improper under the company’s bylaws” and arguing 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 rebutted Jana’s allegations of poor performance, saying it “has made significant strategic, financial, personnel and operational progress” since last year. It also noted that seven of the company’s eight directors are independent, and that management “is fully supported” by the board.

Jana has already fired the first salvo, with an affiliate filing suit to prevent CNET from junking its nominees based on its bylaws.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.