) announced the successful completion of the acquisition of 50%
stake in TVGN, TV Guide Network's pay channel, and the website
JPMorgan Chase & Company
) One Equity Partners. The company shelled out an approximate of
$100 million for the purchase. The price paid by CBS is
significantly lower than $123 million paid by One Equity Partners
for a 49% stake 4 years ago.
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TV Guide magazine, a separate entity and owned by OpenGate
Capital, is, however, not a part of the deal.
Following the acquisition, CBS has become a partner of the
Lions Gate Entertainment Corp.
), which holds the remaining 50% interest in TVGN. Lions Gate
bought the network in 2000 for $241 million.
CBS' association with Lions Gate is not new, as the companies
have worked in collaboration in the past. Lions Gate produces the
shows "Weeds" and "Nurse Jackie" for Showtime, a pay cable
channel owned by CBS.
TVGN, which airs reruns of programs like "Who's The Boss," ''Ugly
Betty" and older movies, is now available in more than 80 million
homes. Though no changes were currently made in the channel, the
company said that it will announce rebranding efforts and a new
programming strategy later.
CBS has been looking to expand in the basic cable arena for some
time. Moreover, in a strategic move to unlock the value of the
assets, CBS decided to convert its CBS Outdoor operations in
North America and South America into a real estate investment
trust ("REIT") and divest its Outdoor businesses in Europe and
Asia. CBS appears to be following the footsteps of billboard
Lamar Advertising Co.
) which intends to convert itself into a REIT, as announced last
We believe CBS Corporation's decision regarding the Outdoor
business would augur well for the company, as it would lower its
dependency on advertising, which remains vulnerable to the
Currently, CBS has a Zacks Rank #2 (Buy).