Napster promptly postponed its annual meeting yesterday and instead made the shock announcement that it has entered into a definitive merger agreement to be acquired by Best Buy. Rabbits? Hats?
The deal values Napster shares at a price of $2.65 in cash which puts the purchase at approximately $121 million and while it is subject to customary closing conditions no hitches are expected with the transaction expected to close sometime in Q4.
As you might suspect, the deal has been done to capitalise on Napster's near 700,000 subscribers as Best Buy looks to become a substantial force in the virtual as well as physical marketplaces. Happily, while Napster employs 140 members of staff and is headquartered in LA Best Buy admits it has currently has no major plans to lay off staff or to relocate the business.
"This transaction offers Best Buy a recognized platform for enhancing our capabilities in the digital media space and building new, recurring relationships with customers," said Best Buy President Brian Dunn. "Over time we hope to strengthen our offerings to consumers, who we believe will increasingly seek devices and solutions that enable them to access their content wherever, whenever and however they want."
So the move from illegal, underground, file sharing tool to respected corporate takeover is finally complete. With online music stores proving to be the flavour of the month however it will be interesting to see if this is the last of the major buy-outs. I suspect not.
Yacht keys at the ready, 7Digital owners...