More than a dozen bidders have expressed interest in buying the assets of bankrupt online music-swapping site Napster, an investment banker handling the bidding process said on Monday.
Rick Chance, managing director at Trenwith Securities, the investment banking unit of BDO Seidman LLP, said that the bids will be analysed and the bank will provide a recommendation to Napster’s official creditors committee later this week.
Bidding will close for Napster’s assets on September 17.
In a ruling on September 13, a bankruptcy judge gave Trenwith and the committee until September 27 to select the highest and best bidder for Napster’s assets, Chance said. The Napster asset sale has drawn both US and international bidders, Chance said in a statement.
”Trenwith is pleased with the quality and quantity of bidders involved in this process given the accelerated time frame that the process is being conducted under,” he said.
Napster was the revolutionary song-swapping service that attracted tens of millions of online music fans but also the enmity of the Hollywood music industry players, who said that the service enabled an epidemic of what was in effect online music shoplifting.
As its popularity soared, so did Napster’s brand recognition. Millions of youthful Internet users now recognise the cool cat with stereo music headgear that is its logo.
Last Thursday, Private Media Group, a Barcelona-based adult entertainment company that is traded on the Nasdaq, had publicised its own bid of one million shares in Private Media stock.
This bid, which is about $2,82-million based on Private Media’s current share price, amounts to less than half the minimum bid threshold set by the investment bank when the bidding process began on September 3.
In an interview on Monday, Private Media officials detailed a plan to create the first dedicated peer-to-peer exchange for pornography. Private Media will pursue the plan regardless of whether it succeeds in acquiring the Napster assets, it said.
Charles Prast, president and chief executive of Private Media, says his company is much more interested in the Napster brand and trademark than the technology behind it.
The technology, he said, ”is not terribly relevant to us because we are not going to support the exchange of MP3s (digital music), just the exchange of adult videos, text, photos, and stories.”
”We feel Napster stands for the free exchange of ideas and information between like-minded people,” Prast said.
The Private Media official insists that the company’s bid for Napster is no publicity stunt. But Private Media stock did manage to recapture some dot-com magic last week, gaining as much as 24% since announcing its one million share bid.
Private Media shares fell 4,7%, or 14 cents, to $2,82 in Nasdaq trade on Monday.
Currently, Prast claims to have 60 000 registered online users paying either a monthly subscription of $29,95 or paying via a premium dial-up service.
Prast reckons the Napster brand name alone is a gold mine. If successful, he figures, millions of curious online music fans will visit the new Napster.
”Typically, we convert 10% of our visitors. If we get two million people paying $30 a year (the proposed subscription fee for a Napster adult-oriented site), I’ll be a happy man and our shareholders will be very happy.”
He added there are still a number of issues the company needs to work out in terms of a new red-light district Napster brand image.
”We would look at how to tweak the brand to make it more sexy. But certainly the brand and the logo are fabulous. The cat stays. The earphones may go, we may need to add horns to him, as my design department has shown me,” he said. – Reuters