News Corp. on Monday agreed to buy Intermix Media Inc., owner of the social-networking site, for $580 million in cash to expand its Internet offerings.

News Corp. will pay $12 a share, a 12 percent premium over L.A.-based Intermix's closing price on Friday.

The deal announced Monday is the first investment by News Corp.'s newly formed Internet business unit Fox Interactive Media, which the company announced on Friday.

Richard Rosenblatt, Intermix Media's CEO, and MySpace CEO, Chris DeWolfe, will continue in their roles after the acquisition is completed. They will join Fox Interactive Media, led by Ross Levinsohn.

The News Corp. deal is expected to close in the fourth quarter.

Intermix's largest shareholder, VantagePoint Venture Partners, which holds a 22.4 percent stake in the company, agreed to vote its shares in favor of the transaction, News Corp. said.

"Intermix is an important acquisition for News Corp., instantly doubling the number of visitors to our sites and providing an ideal foundation on which to meaningfully increase our internet presence," said News Corp.'s Chairman and Chief Executive Officer, Rupert Murdoch, in a statement Monday.

Intermix, whose more than 30 Web sites include and gaming and entertainment site, is also buying the 47 percent of that it doesn't already own.

Intermix was the target of a lawsuit by New York State Attorney General Eliot Spitzer, who accused the company of false advertising and deceptive business practices in using "spyware" that delivered pop-up advertising and redirected Web traffic to an Intermix search engine. Last month, the company reached an agreement to pay $7.5 million over three years to settle the accusations.

Intermix shares settled up 9.5 percent to $11.74 on Monday.

For reprint and licensing requests for this article, CLICK HERE.