MP3.com purchased by Vivendi Universal
MP3.com wonít have to worry about future lawsuits from the Universal Music Group because the record giantís parent company Vivendi Universal has now agreed to buy the company for $372 million.
The MP3.com board of directors unanimously approved the sale of the company to Vivendi Universal at $5 per share. MP3.com shareholders will be given the choice of taking $5 cash for each share or receiving $5 in Vivendi Universal's American depository receipts. MP3.comís stock was trading at $3.01 per share at the close of the Nasdaq on Friday but after news of the Vivendi Universal deal broke the stock climbed to $4.85 a share by the close of the market today (May 21). The MP3.com shares traded at a high of $22.50 last June.
Mp3.com will remain an independent company but Vivendi Universal plans to use the popular music site to their advantage. "Their engineering and digital expertise will be a tremendous advantage for Vivendi Universal, especially in the digital distribution of all Vivendi content and the creation of common technology platforms," said Vivendi chairman Jean-Marie Messier.
This acquisition may have a deep impact on how the major record companies distribute music online with Vivendi Universal taking the early lead. This may pressure other record companies to jump into the ring, or be left behind.
Vivendi Universal already has a stake in
other online music ventures including Duet- a joint venture between Vivendi
and Sony Music that will be marketed on Yahoo. GetMusic.com was another
joint venture for Vivendi Universal. However, last March Vivendi Universal
agreed to purchase the other half of the company from their partner BMG
Entertainment. Vivendi also owns Farmclub.com and purchased Emusic.com
last month for a little over $23 million.