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(AP) - Consumer electronics retailer Best Buy Inc. said
Monday it will acquire online music-sharing site Napster Inc. for
about $126.8 million in cash in a move to boost its digital media
capabilities.

      Best Buy will begin a tender offer for all outstanding Napster
shares for $2.65 per share, representing a 95 percent premium to
the stock's closing price Friday of $1.36 per share.


      According to its most recently quarterly filing, Napster had
about 47.9 million shares outstanding as of June 30, implying a
price of $126.8 million. In a statement, Best Buy valued the deal
at $121 million - or $54 million after netting about $67 million in
Napster's cash and short-term investments.


      The takeover is expected to close in the fourth quarter. The
deal includes Napster's 700,000 subscribers, its Web-based
customer-service platform and mobile capabilities.


      Napster Chief Executive Chris Gorog and other senior management
will continue in those roles. The Los Angeles-based company has
about 140 staffers and Best Buy said it does not plan to relocate
the headquarters or make "significant" changes in personnel.


      Napster said it will postpone its annual meeting of
stockholders, scheduled for Thursday, due to the acquisition
agreement.

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Consumer electronics retailer Best Buy Inc. said
Monday it will acquire online music-sharing site Napster Inc. for about $126.8 million in cash, in a move to boost its digital media capabilities.

Best Buy to acquire Napster

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