Viacom Bids For SportsLine

Looks like SportsLine.com (Nasdaq: SPLN  ) has found itself a buyer.

On May 20, the struggling website operator announced it had hired an investment bank to help explore sale options, claiming its stock was undervalued while hovering around the $1 per share mark. This morning, the company said that Viacom (NYSE: VIA  ) -- which already owns 38% of SportsLine -- has come through, offering to purchase the remainder of the company for $1.50 per share in cash.

The proposed deal values SportsLine at $64 million, and a 39% premium over the stock's price at yesterday's close.

Such an acquisition would seem to make sense for both parties. SportsLine's flagship website, CBS SportsLine, already carries the name of Viacom's subsidiary. And though still lacking in profitability, the site has had some success with its fantasy sports leagues, where it benefits from CBS' coverage of both March Madness and the NFL. Meanwhile, SportsLine also manages the official websites of NCAA Sports, as well as the NFL and the PGA Tour.

SportsLine does face stiff competition in the fantasy world from the likes of Yahoo! (Nasdaq: YHOO  ) and Disney's (NYSE: DIS  ) ESPN.com. That said, though ESPN carries the brand, SportsLine's technology is considered by many to be superior. I, for one, prefer SportsLine's front-page scores and live game feeds, which update without refreshing.

In addition, SportsLine would clearly benefit from Viacom's full monetary backing.

As part of the proposal, CBS and SportsLine have agreed to defer a cash-and-common-stock payment due from SportsLine to CBS on July 1 until Aug. 1. Meanwhile, a special committee of SportsLine's board of directors will evaluate the deal.

But it probably won't stop there. Upon word of the proposal this morning, SportsLine's stock shot up past the $1.50 bid. With the stock now trading at $1.63 per share, the market clearly thinks that a bigger bid is forthcoming, though I think it most likely has to come from Viacom itself.

Fool contributor Jeff Hwang owns none of the companies mentioned above.