Best Buy to acquire digital music service Napster

Napster Inc., the online music community that rose from a dorm room project to become the scourge of the global recording industry, is being purchased by Best Buy Inc. for nearly $127 million as the electronics retailer tries to boost its digital music business, reports the Associated Press. The $2.65 per share all-cash deal announced Sept. 15 is nearly double the music network’s Sept. 12 closing price but a small sum to pay for Best Buy, which gets access to Napster’s 700,000 subscribers who pay a monthly fee to access digital music catalogs. "It’s not a huge investment, but it definitely has brand recognition," said Morningstar analyst Brady Lemos, who said Best Buy also benefits from the acquisition of technical expertise about the digital music industry. The takeover, which must receive regulatory and shareholder approval, is expected to close in the fourth quarter.
Richfield, Minn.-based Best Buy said it doesn’t plan to relocate Napster from its Los Angeles headquarters or make any "significant" personnel changes…

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