UMG BUYS EMUSIC

Under the terms of the agreement, UMG will commence a cash tender offer to acquire all of EMusic's outstanding shares at a price of 57 cents a share. Any shares not purchased in the tender offer will be converted into the same cash price in a subsequent merger. The deal is worth a reported $24.6 million, which includes the super-swell EMusic goodie bags throw in to sweeten the deal.

"EMusic represents a tremendous group of assets that appeal to a wide range of music fans, including the popular RollingStone.com and DownBeat.com brands and a deep catalog of digital music," commented Larry Kenswil, president of UMG's eLabs. "We feel that EMusic complements Universal's other digital and Internet initiatives and we look forward to joining with them to offer music lovers more and more compelling online destinations and experiences. Not as compelling as porn, but, you know, pretty compelling nonetheless."

UMG already owns the Farmclub.com and GetMusic.com websites.

The deal—or dealio, as they call it on the street—was unanimously approved by EMusic's board of directors, with 17% of the company's outstanding shares already pledged to the tender offer.

"We believe that this transaction is in the best interests of our stockholders," said EMusic President/CEO Gene Hoffman. "The addition of EMusic and RollingStone.com to Universal Music Group has some very exciting potential for online music fans. Not as exciting as porn, but, you know, pretty exciting nonetheless."