Yahoo! to buy music site for $12m
Published: 28 Jun 2001 15:57 BST
Looking to broaden its entertainment offerings, Internet giant Yahoo! on Thursday said it has agreed to acquire Launch Media in a cash-for-stock deal valued at approximately $12m.
Launch Media operates Launch.com, a Web site that offers streaming audio, music videos, artist information and music news. Yahoo! said the addition will complement its existing entertainment sites including Yahoo! Music, Yahoo! Broadcast and Yahoo! Radio.
Under the terms of the deal, Yahoo! will begin a cash tender offer to purchase all of Launch's outstanding shares at a price of 92 cents per share, representing a value of about $12m. Yahoo! also has extended a $3m loan to Launch, in addition to the $2m it lent the company last month.
Launch's shares closed Wednesday at 58 cents, well off last year's high of $9.25.
The deal, which is subject to customary closing conditions, is slated to close in the third quarter of this year. Launch's board has unanimously approved the merger transaction.
Launch's operations will remain in Santa Monica, California, after the deal is finalized.
Also on Thursday, Launch said it has settled a copyright infringement suit brought by Universal Music Group and other major record labels in connection with Launch's Internet radio service. It has agreed to pay for content run previously on its site and to enter into a nonexclusive licensing agreement with Universal for the use of its recordings over its Web radio service, Launchcast.
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