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ZDNet Soars 29% on Hopes for Purchase by Tech Company (Update1)
ZDNet Soars 29% on Hopes for Purchase by Tech Company (Update1)
New York, Sept. 17 (Bloomberg) -- ZDNet shares soared 29 percent on investor speculation that the unit of Ziff-Davis Inc. could be bought by a technology or Internet company for about $45 a share, more than triple its closing price yesterday.
Shares of the Internet technology-news publisher, which is about 86 percent-owned by Softbank Corp.'s Ziff-Davis, rose 4 1/8 to 18 1/8 in trading of 1.64 million shares, more than seven times the three-month daily average. Ziff-Davis rose 7/8 to 16.
Ziff-Davis hired Morgan Stanley Dean Witter & Co. two months ago to explore strategic options for the company, including alliances, joint ventures, a merger or a sale. Earlier this week, the company said it's progressing with this plan, though it wasn't in active talks with any companies about a transaction.
Peter Hadden of Putnam Investment Management, a ZDNet investor, told Business Week in a report yesterday that San Francisco-based ZDNet is worth $45 a share, based on the market capitalization of rival Cnet Inc. He said ZDNet could be bought by a larger technology or Internet rival, with Softbank retaining a stake in the company.
A Ziff-Davis spokesman today reiterated that the company ``has seen a tremendous amount of initial interest in Ziff-Davis and its businesses,' though it's not in active negotiations.
ZDNet shares soared to 48 11/16 on April 1, a day after being sold to the public for 19 each. Since then, they've fallen about 63 percent.
Shares Doubled
Meanwhile, shares of Ziff-Davis, which publishes PC Week and owns the Comdex computer trade show, have more than doubled in the past 12 months. Still, some investors say they're also undervalued. ``Ziff-Davis (including its stake in ZDNet) is worth at least 25 in the public market -- at a minimum,' said Storm Boswick, portfolio manager of J&W Seligman, which owned about 2.3 million Ziff-Davis shares and 200,000 ZDNet shares as of the end of June. ``I'd like to see (Ziff-Davis) get sold or do a leveraged buyout,' he said, adding that ZDNet should remain a publicly traded company. Boswick said traditional media companies, Internet and technology companies would make good buyers for Ziff- Davis.
Separately, ZDNet formed an alliance with Monster.com, an online career site owned by TMP Worldwide, to offer job listings and other job-related information on ZDNet sites in Europe. It's expected that ZDNet will form other alliances over the next few weeks. |
