Petteri Pyyny
20 May 2001 12:38
Vivendi Universal (a group that owns hundreds of music/tv/movie/etc companies, including Universal Music Group) has agreed to buy MP3.com and all its assets for $372 million.
The deal gives MP3.com's shares a value of $5 each, giving them nice a premium of almost $2 (MP3.com's shares closed at $3.01 this week). The deal is paid in Vivendi's American Depositary Receipts (papers that are treated like regular shares, but are issued because Vivendi is listed in Paris stock exchange) and in cash (50-50 split).
"MP3.com will be a great asset to Vivendi Universal in meeting our goal of becoming the leading online music service provider," said Jean-Marie Messier, Vivendi's chairman and chief executive officer, in a release.
Vivendi can be categorized only as "giant" -- in all terms. It's the biggest music company in the world and music isn't really it's only business -- the company does just about anything related to multimedia & traditional entertainment.
MP3.com was the miracle child of the Internet -- it was one of those IPO's in 1999 that made us all believe that the Net will make everyone rich (check their stock charts here) The company made its worst decision when they launched the My.MP3.com service that lead to legal trouble with major (and minor) record labels. Actually Universal Music Group (part of Vivendi) was the only company that did not settle out of court with MP3.com, but instead went all the way to the end and received over $50M from MP3.com in damages.
Anyway, now a page in the history of digital music has turned -- maybe the last major one? Now those two "rebels" of the music world; Napster and MP3.com are where they seem to belong -- in the hands of the major record labels.