Napster mulls alliances, sale

09/19/06 - newratings.com

NEW YORK, September 19 (newratings.com) – Online music company Napster Inc (NAPS) Monday announced that it was considering either selling the company or entering into strategic tie-ups in the near future. Napster’s share price appreciated more than 10% on Monday after the announcement.

Chris Gorog, Napster's chief executive, mentioned that the company had received enquiries from third parties regarding a possible deal. Napster has appointed investment bank UBS to help analyze the various possible opportunities or alliances. Los Angeles-based Napster had started as a free download music service, but had to file for bankruptcy protection after being sued by various record companies in 2002. The company’s paid subscriber base declined 7% to 508,000 in the three months ended June 30.