CNet shares hit 52-week high on CBS deal

Shares of the company, whose CNet site is known for tech reviews and news, but owns Web properties including ZDNet, TV.com and GameSpot.com, rose $3.46, or 43.5 percent, to $11.41. Earlier, the shares traded as high as $11.44.

In a move intended to expand CBS' Internet presence, the media and entertainment company will pay $11.50 per share for CNet -a 45 percent premium above CNet's Wednesday closing price. The purchase may also get CNet out of a skirmish with one of its biggest stockholders, which had been pushing for changes at the company in the wake of a stock slump.

In a phone interview, Pacific Crest Securities analyst Steve Weinstein said he was surprised by the deal, and noted it could be positive for CNet shareholders.

"I think for shareholders this is a good deal. It was a platform with a lot of potential opportunity, but the opportunity wasn't really being realized," said Weinstein, who rates the stock "Sector Perform."

He said that CNet has a lot of good brands, but that growth hasn't really been there.

"I think there's a lot of work to be done behind the scenes. It will be interesting to see if (CBS has) the know-how to do it," he said.

Meanwhile, ThinkPanmure LLC analyst William Morrison raised his rating for CNet shares to "Accumulate" from "Source of Funds" and increased his price target to $11.50 from $6.

Morrison said he is "astounded" at the acquisition price, considering CNet saw up to 3 percent organic growth in the first quarter.

"We believe this is clearly the best possible outcome for CNet shareholders. We expect the deal to be completed by (the third quarter of 2008) with minimal resistance from shareholders or regulators," he said.