EMusic.com has announced that it has entered into a non-binding letter of intent to be acquired by a major publicly-held media company in a cash transaction. The proposed acquisition price is $0.57 per fully diluted share. EMusic’s stock rose $0.16 on the news, closing at $0.34 per share. EMusic declined to reveal the company that is acquiring it, but sources close to the deal tell Gavin.com that it is Universal Music Group, which the Washington Post confirms.
Completion of the transaction is subject to the usual tire-kicking, including satisfactory completion of due diligence reviews by the acquiring company, the negotiation and execution of definitive agreements, Board approvals, and satisfaction of all SEC regulatory requirements. There can be no assurance that the parties will finalize or execute such definitive agreements, that the terms of such agreements may not be materially different than set forth in the letter of intent or that if definitive agreements are executed, the transaction will be consummated.
As part of the letter of intent, EMusic has agreed to a short period of exclusive negotiations during which it will not engage in discussions regarding an acquisition of the Company with any other party.
EMusic also announced that it expects to report revenues for the quarter ended March 31, 2001 of approximately $4.2 million. The company expects to report music revenues for the quarter of approximately $2.2 million, up from $1.7 million in the quarter ended December 31, 2001.