Best Buy to acquire Napster
(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.
(Copyright 2008 by The Associated Press. All Rights Reserved.)
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