The proxy battle for control of Napster (NASDAQ:NAPS) has been ended through the form of an acquisition. Richfield, Minnesota based retailer Best Buy Co., Inc. (NYSE:BBY) has bought the digital music download company for $121 million. The agreement is that Best Buy would buy out all of Napster’s stock at a price of $2.65 per share in cash. The transaction will close in the 4th quarter.
Through the acquisition, Best Buy will gain control of Napster’s 700,000 subscribers, the web platform behind the company, and the mobile platform. Napster CEO Chris Gorog and other senior members of the company will stay on board with Napster for an agreed amount of time.
?This transaction offers Best Buy a recognized platform for enhancing our capabilities in the digital media space and building new, recurring relationships with customers,? stated Brian Dunn, President and COO of Best Buy. ?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.?
Prior to the acquisition, three of Napster’s shareholders were in a proxy battle to have the board ousted. These three individuals were Perry H. Rod, Thomas Sailors, and Kavan P. Singh. But then Napster hired UBS to solicit an acquisition.
Napster generated revenue of about $127.5 million in 2008. This was a 15% increase from 2007. Shawn Fanning should be proud. The company he started in college is still worth something today, even 8 years after the dot com bubble crash.