RICHFIELD, MN (Hypebot) – Retail giant Best Buy is acquiring Napster via the cash purchase of outstanding shares for $2.65. Napster stocked closed Friday at $1.36. The proposed acquisition includes the online music store's 700K subscribers and $67 million in cash on hand. CEO Chris Gorog and key members of senior management have agreed to stay with the company.
With subscription sales flat and iTunes as competition, Napster has struggled to gain consumer traction. Sales of physical CD's have been tumbling at Best Buy who recently announced it will shrink CD floor space to make room for new music instrument sections. Together may be able to find on and offline cross-promotions and other synergies that will differentiate them from online only iTunes, Amazon and Rhapsody.
The transaction has been unanimously approved by the board of directors of Napster, and Napster’s directors and executive officers have agreed, in their capacities as stockholders, to tender their Napster shares and otherwise support the transaction.
FROM THE PRESS RELEASE:
“We believe Napster brings us excellent capabilities in the mobility space, as well as international operations and an established team of technology experts,” said Dave Morrish, Executive Vice President – Connected Digital Solutions of Best Buy. “We can foresee Napster acting as a platform for accelerating our growth in the emerging industry of digital entertainment, beyond music subscriptions. We’re very excited to add these capabilities to leverage our existing relationships with the labels, the studios, and the hardware providers. We believe Napster will be an outstanding addition to our already robust portfolio of partners and offerings in the digital music space.”
“We believe Best Buy will be an ideal partner for Napster and are very excited by the benefits that this transaction delivers to our shareholders, partners and employees. Best Buy is uniquely positioned to benefit from Napster’s digital entertainment distribution platform. We are looking forward to combining our digital media capabilities with Best Buy’s resources and global network to extend our digital content platforms,” said Chris Gorog, chairman and CEO of Napster.