[Infowarrior] - Best Buy to Buy Napster

[Richard Forno]

Best Buy to Buy Napster In $121 Million Acquisition
By AJA CARMICHAEL
September 15, 2008 9:12 a.m.

http://online.wsj.com/article/SB122148359646535989.html?mod=hpp_us_whats_news

Best Buy Inc. has agreed to buy Napster Inc. for $121 million, a deal  
that the consumer-electronics giant said it will use to reach new  
customers.

The deal, which includes $67 million of cash and short-term  
investments on Napster's books, values the provider of digital music  
at $2.65 a share, nearly double Friday's closing price of $1.36.

The acquisition, which is set to close in the fourth quarter, includes  
Napster's 700,000 digital entertainment subscribers, Web-based  
customer-service platform and mobile capabilities.

"Best Buy intends to use Napster's capabilities and digital subscriber  
base to reach new customers with an enhanced experience for exploring  
and selecting music and other digital entertainment products over an  
increasing array of devices," said Best Buy President and Chief  
Operating Officer Brian Dunn.

Best Buy has been expanding its wireless products and services,  
rolling out cellphone departments to all of its U.S. stores. In May,  
the consumer electronics retailer paid $2.1 billion to form a joint  
venture with U.K.-based Carphone Warehouse Group PLC.

Napster said Chief Executive Chris Gorog and the company's senior  
executives will remain in their posts. The company does not plan to  
relocate its Los Angeles headquarters.

In late May, Napster began selling songs in the unrestricted MP3  
format, a move the company hoped would bolster its position against  
Apple Inc.'s iTunes and Amazon.com Inc.'s online store. Napster also  
continued selling restricted tracks via its subscription service.

Shares of Best Buy fell 3.3% to $43.01 in premarket trading amid broad  
weakness caused by the weekend's unprecedented developments in the  
financial sector.

Write to Aja Carmichael at aja.carmichael at wsj.com