Web Music, CD Distributor to Merge
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REDWOOD CITY, Calif. (AP) _ Liquid Audio Inc., which developed key aspects of Internet music delivery, is merging with Alliance Entertainment Corp., a privately held company that distributes CDs and other real-world media to stores.
The deal, disclosed Thursday, calls for Coral Springs, Fla.-based Alliance to get 46.2 million new shares of Liquid Audio _ worth $106.3 million _ and own 67 percent of the newly formed public company. Liquid Audio shareholders would own the remaining 33 percent.
``Combining the two businesses enables us to provide a unique solution for both content owners and retailers of home entertainment products as we see their digital and physical delivery needs converging,″ said Alliance’s president and chief executive, Eric Weisman.
Liquid Audio shares, which traded around $50 at the height of Internet mania, gained 1 cent to close at $2.31 Friday on the Nasdaq Stock Market.
Redwood City-based Liquid Audio, which sells software that distributes and tracks online content, began considering a merger or going through liquidation last year. The latter course had been urged by at least two large shareholders, Steel Partners II and Musicmaker.com.
But Liquid Audio said in a news release that its board had decided the Alliance merger represented the best strategy. Its shareholders and federal regulators must still approve the deal.
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