In
an effort to keep pace with other consumer electronic chains entering
into the digital music market, Best Buy Inc. agreed to pay US $121
million for online music retailer Napster Inc.
As
part of the deal, Napster shares are being valued at $2.65 a share,
nearly doubling its Friday closing price of $1.36. Best Buy said it
would be acquiring Napster’s 700,000 subscribers as well as the
company’s Web-based and mobile retail capabilities.
The
original Napster was a pioneer in the digital music market, offering a
free music sharing service to its users. Following a lawsuit by the
music industry, the company was shut down by U.S. courts in 2002 over
copyright infringement issues. It was later reopened as a legitimate
online music distribution service in 2003.
The deal is set to close later this year.