• Marketwatch, Wednesday, January 16, 2008 10:45 AM

CNET Networks adopted a poison pill on Monday in a clear attempt to block a potentially hostile takeover of the company by JANA Partners, a hedge fund. Last week, the technology publisher's announced that its board of directors had adopted a stockholder rights plan to "deter coercive takeover tactics and to prevent an acquirer from gaining control of the company without offering a fair price." In addition, the company adopted substantial severance payments for its board members, should a takeover come to pass.

The plan allows the company to issue additional shares at a discount if any person or group acquires more than 15 percent of the company's stock. The idea is to dilute the value of the acquirer's new holdings. In a written statement, CNET said it instated the new rights plan to force would-be acquirers to negotiate with the company's board priot to attempting a takeover. Barry Rosenstein, JANA's managing partner, responded by calling the move "outdated," adding that JANA only sought to "create value" for shareholders.

As Silicon Alley Insider's Henry Blodget says, (link: http://www.alleyinsider.com/2008/01/cnets-wimpy-poison-pill-and-severance-agreements.html ) "If there was any doubt who CNET's senior management team is looking out for, there's no doubt now: CNET's senior managers." On the other hand, CNET's board has responded to a hostile move with an equally hostile move, which could result in bringing both parties to the negotiating table.

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