Awaiting its annual shareholder meeting on September 18, the once digital-music pioneer, now legal service aspirant Napster announced its stakeholders in a letter Friday that it’s still employing investment bank UBS and may be planning some “strategic alternatives” in seeking a buyer.
The purpose of the letter was to determine shareholders not to give their vote to three activist candidates for the board. “The press release recently filed by the dissident group appears to imply that your board is not willing to consider a sale of the company,” the letter read. “This is not true.”
The recommendation further implied that shareholders re-elect current board members, namely Richard Royko, Philip Holthouse, and Robert Rodin and not the opposing candidates.
Napster was the first to break onto the digital music ground and the first to pay the price. The free p2p service was taken down after a high-profile trial. Since then it has perseveringly tried to make a comeback as a legitimate subscription-based music service but without too much success. Perhaps adding 6 million DRM-free MP3s would’ve made a difference, the problem was Amazon MP3 had the offer covered already.
Napster’s letter to shareholders focused on the wrong track the proposed new board members would put the company on “The dissident group’s nominees have no relevant experience in the digital-music industry, have no public-company board experience, and the dissident group has not put forth any substantive plan for how their nominees will enhance value for our stockholders, if elected to the board,” the letter read.