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CBS Corp. (CBS - Analyst Report) announced the successful completion of the acquisition of 50% stake in TVGN, TV Guide Network’s pay channel, and the website TVGuide.com from JPMorgan Chase & Company's (JPM - Analyst Report) 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.

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 entertainment company, Lions Gate Entertainment Corp. (LGF - Analyst Report), 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 operator, Lamar Advertising Co. (LAMR - Analyst Report) which intends to convert itself into a REIT, as announced last August.

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 economy’s health.

Currently, CBS has a Zacks Rank #2 (Buy).

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