JANA GROUP INCREASES CNET VOTING STAKE
ADDRESSES CNET'S ATTEMPT TO CURTAIL SHAREHOLDER RIGHTS
NEW YORK, January 9, 2008 - JANA Partners LLC ("JANA") today disclosed that it
has increased its voting stake in CNET Networks, Inc. (Nasdaq: CNET). JANA now
holds approximately 10.5% of CNET's voting stock and maintains a separate
approximately 6% non-voting economic interest. In addition, Sandell Asset
Management Corp. ("Sandell") now holds an approximately 1.5% voting interest and
maintains a separate approximately 3.5% non-voting economic interest in CNET.
JANA has joined with Sandell, Paul Gardi of Alex Interactive Media, Spark
Capital and Velocity Interactive Group in seeking to elect two individuals to
replace the board members who are up for re-election at CNET's 2008 stockholders
meeting and to expand CNET's board by five members and nominate individuals to
fill those vacancies.
JANA also denied CNET's misrepresentation that JANA was attempting to gain
"control of the Company without offering sufficient value to all stockholders."
JANA Managing Partner Barry Rosenstein noted that the group's plan is to add
highly-qualified Board members who will focus on creating long-term value for
all stockholders and that no offer for the company had been made by the group.
Rosenstein said, "Not surprisingly, CNET has mischaracterized our objectives. We
have not made an offer to buy the company without paying a premium. In fact, it
is CNET's own underperformance that makes it more vulnerable to an opportunistic
acquirer looking to acquire it cheaply and create value for its own benefit
rather than the benefit of all stockholders. We are seeking to address this
underperformance and will benefit only to the extent all stockholders benefit.
This is why we have taken the unique step of partnering with a venture capital
fund and experienced operators and managers, all of whom have a history of
focusing on creating long-term, sustainable value for stockholders."
JANA also addressed CNET's contention that JANA's nomination of candidates for
CNET's board is "improper" under CNET's bylaws. Rosenstein said, "CNET does not
have the right to pick and choose which stockholders have a `legitimate
interest', whether under Delaware law or broader principles of a board's duty to
stockholders. We have proposed highly qualified Board nominees with significant
operating and board experience and who have substantive proposals to address
CNET's ongoing underperformance. We find it outrageous that CNET's response is
to hide behind a clearly invalid interpretation of the bylaws to prevent
stockholders from exercising their legitimate rights, which we believe will be
futile."
JANA has been advised that CNET's interpretation of its bylaws, which would
permit only stockholders who have held $1,000 worth of stock for a year to
propose business and nominees and would allow only the board's nominating
committee to nominate directors, is clearly flawed. Moreover, CNET's
interpretation conflicts with clearly established principles of Delaware law,
including the principles that bylaws must be reasonable and cannot interfere
with stockholder voting rights absent a proper purpose, such as providing for an
orderly meeting of shareholders, and that a company cannot use its bylaws to
treat holders of the same class of stock unequally with respect to their voting
rights. An affiliate of JANA filed suit earlier this week in Delaware Chancery
Court seeking to enjoin CNET's attempt to prevent it from nominating directors
and bringing other business at the 2008 stockholders meeting.
BACKGROUND
JANA PARTNERS LLC is a multi-billion dollar investment management firm founded
in 2001 by Barry Rosenstein. JANA has on numerous occasions, alone or with other
shareholders, challenged management to focus on creating shareholder value,
including with respect to Kerr-McGee Corporation, Time Warner, Titan
International, TD Ameritrade and The Houston Exploration Company.
ALEX INTERACTIVE MEDIA, LLC ("AIM") is a private company focused on leveraging
its domain expertise in digital media and related industries.
SPARK CAPITAL is a venture capital fund focused on building businesses that
transform the distribution, management and monetization of media and content,
with experience in identifying and actively building market-leading companies in
sectors including infrastructure (Qtera, RiverDelta, Aether Systems, Broadbus
and BigBand), networks (College Sports Television, TVONE and XCOM) and services
(Akamai and the Platform). Spark Capital has over $600 million under management,
and is based in Boston, Massachusetts.
VELOCITY INTERACTIVE GROUP, LLC is an investment firm that focuses on digital
media and communications. Velocity Interactive Group has offices in Palo Alto,
Los Angeles and New York.
SANDELL ASSET MANAGEMENT CORP., is a multi-billion dollar global investment
management firm, founded by Thomas E. Sandell, that focuses on global corporate
events and restructurings throughout North America, Continental Europe, the
United Kingdom, Latin America and the Asia-Pacific theatres. Sandell frequently
will take an "active involvement" in facilitating financial or organization
improvements accruing to the benefit of investors.
ALL STOCKHOLDERS OF CNET ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND
OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY THE INVESTORS AND
NOMINEES NAMED ABOVE (THE "POTENTIAL PARTICIPANTS") FROM THE STOCKHOLDERS OF
CNET FOR USE AT THE 2008 ANNUAL MEETING OF STOCKHOLDERS OF CNET WHEN AND IF THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. WHEN AND IF
COMPLETED, THE DEFINITIVE PROXY STATEMENT AND FORM OF PROXY WILL BE MAILED TO
STOCKHOLDERS OF CNET AND WILL, ALONG WITH OTHER RELEVANT DOCUMENTS, BE AVAILABLE
AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
POTENTIAL PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE
DEFINITIVE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. INFORMATION RELATING TO
THE POTENTIAL PARTICIPANTS IS CONTAINED IN EXHIBIT 2 TO THE SCHEDULE 14A FILED
BY THE POTENTIAL PARTICIPANTS WITH THE SEC ON JANUARY 9, 2008.
CONTACTS:
Sard Verbinnen & Co
George Sard 212-687-8080
or
Paul Kranhold or Andrew Cole, 415-618-8750
or
JANA Partners LLC
Charles Penner, 212-692-7696
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