10-K Watch: CNET’s Worried About Jana; Credit Facility Trigger Complicates Things
By Rafat Ali - Wed 27 Feb 2008 03:44 PM PST
It is a 10-K kind of day. CNET (NSDQ: CNET) Networks filed its annual 10-K just now, with an added clause in its boilerplate risks section, about its proxy fight with the hedge fund consortium trying to take control of its board: “We anticipate that responding to these proposals and litigation will be time-consuming, expensive and disruptive to normal business operations. In addition, our $250.0 million credit facility includes certain events, including a ‘change of control’, that would cause a default under the credit facility and permit the lender to accelerate the maturity of any outstanding indebtedness with the lender and to terminate the facility. If JANA Partners’ proposals are successful and all of JANA’s nominees are elected to our board of directors, a ‘change of control’ may be deemed to occur under our credit facility. Any default under our credit facility could have a material adverse effect on our financial condition and adversely impact our business. In addition, we are a party to contracts, including severance agreements, which may contain provisions triggered upon a ‘change in control’”.
Some more details from the filing:
Acquisitions: During 2007, it completed nine acquisitions, three local and six outside U.S. Cash used for acquisitions totaled $61.4 million in 2007, and represents payments of $45.8 million for nine acquisitions made in 2007, as well as the payment of $10.0 million of deferred consideration related to the 2004 acquisition of Webshots and $5.5 million of deferred consideration for five other acquisitions in prior years.
-- U.S. Media segment made three acquisitions, of which one was accounted for as an asset purchase and two were accounted for as business combinations. The aggregate purchase price for these acquisitions was $33.1 million in cash, which includes $0.4 million in direct acquisition costs. These include FindArticles and TechTracker.
-- International Media segment made six acquisitions, of which three were accounted for as asset purchases and three were accounted for as business combinations. The aggregate purchase price for these acquisitions was $15.4 million, consisting of $12.9 million paid in cash, $0.4 million in direct acquisition costs and $2.2 million in deferred consideration costs, which includes a note payable of $0.9 million due in June 2008 bearing interest at the rate of 4.0%. Four of these acquisitions took place in China.
