Jana Partners, Sandell, Spark Capital, and entrepreneur Paul Gardi have taken a 21% stake and will try to take over the board by 1) appointing two members to the current 8-member slate, 2) revising the by-laws to increase the board to 13, and 3) appointing a total of 7 directors.
According to Sorkin at the Times, the consortium sent CNET a letter with its proposal two weeks ago, but CNET has not yet alerted investors. CNET apparently responded by rejecting the advance via a technicality–no member of the consortium has held at least 1,000 shares of stock for one year–and suggesting that the consortium is misrepresenting its stake (because much of it is composed of derivatives and options). The proposal will likely proceed to a proxy fight.
JANA just released a detailed plan here, and we add our initial analysis of the situation. Note that JANA and friends are not offering to buy the rest of CNET’s stock. They are trying to invade the boardroom, depose the current leadership, and take over. (Just as we offered to do, albeit in a more friendly fashion).
Other Overnight News
Flailing Motorola buys Singapore digital music company Soundbuzz. The company now says it is the biggest pan-Asian music distributor.
Yahoo to announce new mobile strategy, presumably in response to Google’s Android. A Reuters preview suggests the strategy is 1) a retooling of Yahoo’s front page so it looks better on particular handsets (Yahoo Go 3.0) and 2) a “widget” system where third-party developers can run Google ads and other services within Yahoo (there’s an interesting idea) . The mobile announcement is CEO Jerry Yang’s first major speech since he took over (about time). Shareholders should pray hard that it’s compelling.
Comcast and Panasonic announcing “portable” set-top box that works with multiple cable companies, as well as a plasma TV with a built-in set-top box. Some competition for Scientific Atlanta and Motorola, who make the majority of Comcast’s boxes. Dan Frommer explains why Comcast was forced to do this (FCC and competitive forces).
Tech executives say they now fear the all-powerful Google more than they ever did Microsoft–and want regulators to stop it. In the New Yorker, Ken Auletta also justifiably ridicules the idea that Google and DoubleClick are in “different businesses.”
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