Best Buy Co., Inc. (NYSE: BBY), a multinational retailer of technology and entertainment products and services, and Napster Inc. (NASD: NAPS), one of the most recognized brands in digital music and a leading provider of online music for the consumer market, recently announced that the two companies have entered into a definitive merger agreement for Best Buy to commence a tender offer for all outstanding Napster shares at a price of $2.65 per share in cash.

With an aggregate purchase price of roughly $121 million (or $54 million net of approximately $67 million in cash and short-term investments of Napster as of June 30, 2008), the proposed acquisition includes Napster’s 700,000 digital entertainment subscribers, its Web-based customer service platform and mobile capabilities. The transaction is subject to customary closing conditions and is expected to be completed during the fourth calendar quarter.

Brian Dunn, the president and chief operating officer of Best

Maybe you’re thinking Best Buy Co. Inc. (NYSE: BBY) and Napster Inc. (Nasdaq: NAPS) were dominating giants in their respective industries. Now the two companies have announced they will merge into a mega-media company through a definitive agreement worth approximately $121 million. Best Buy will offer all outstanding Napster shares for $2.65 per share in cash.

Napster recently launched one of the world’s largest MP3 stores and posted fiscal 2008 revenue of $127.5 million, up 15 percent from the year prior; a loss of $16.5 million, as compared to a loss of $36.8 million the prior fiscal year; and positive cash flow for the fiscal year ended March 31, 2008.

Unanimously approved by Napster’s board of directors, the acquisition will include around 700,000 of Napster’s digital entertainment subscribers, its Web-based customer service platform, and its mobile capabilities.

“This transaction offers Best Buy a recognized platform for enhancing our capabilities in the

Napster (Nasdaq: NAPS) was one of the first in taking steps toward digital music evolution. The company offers interactive music experiences that allow users to share, acquire and listen to music. The company, along with Lenovo, today announced a co-marketing agreement in which Lenovo will offer Napster’s music subscription service on its notebook and desktop PCs in the United States and Canada.

Lenovo is focused on creating the world’s best-engineered personal computer. The agreement with Napster will allow the company to offer its customers instant access to millions of music tracks with a free, 14-day trial subscription of Napster To Go, as well as unlimited, on-demand access to Napster’s music catalog of more than 6 million songs.

For Napster, the deal highlights the company’s market reach and strength in the music industry. “Napster’s partnership with Lenovo, a global leader in the PC market, demonstrates the power of our brand