Quantcast
Insiders cite the pending AOL merger with Time Warner as a factor in the breakdown of the deal.

COLUMBIA HOUSE, CDNOW SAY "LATER"

Mail-Order Music Merger Mashed
March 13, 2000

The planned purchase of online music retailer CDNow by Columbia House, the mail-order music business jointly owned by Time Warner and Sony, is dead.

"We are obviously disappointed that the merger originally envisioned last July will not be completed," said CDNow President/CEO Jason Olim. "But if Columbia House will reconsider, I’m prepared to send them the entire Uriah Heep catalog, free of charge."

Olim said Sony and Time Warner have committed $51 million to CDNow by providing an additional $21 million in cash as an equity investment and converting an existing $30 million short-term loan into long-term convertible debt.

Despite that commitment, industry insiders see the collapsed deal as bad news for CDNow, which has retained Allen & Co. to explore other business options.

Olim told Reuters that the company will attempt to reduce costs by almost a third in the coming year as a result of the collapsed merger.

The original terms of the merger were never disclosed.

CDNow's stock has tumbled over the past year with the per share price floating in the mid-20s in July of 1999. At presstime, the stock closed at $8 a share.

Insiders cite the pending AOL merger with Time Warner as a factor in the breakdown of the deal.

CDNow's overall 1999 revenue was $147 million. Its fourth-quarter revenue was $53.1 million. The company's net loss for the fourth quarter was $25.7 million.

THIS IS ANOTHER STORY ABOUT ADELE BREAKING RECORDS
Big news from the Spot. (10/15a)
KACEYGATE: ESQUIRE EVISCERATES THE GRAMMYS
This is getting ridiculous (10/14a)
ADELE BY THE NUMBERS: ALBUMS, SINGLES RTD
It all adds up. (10/13a)
GRAMMY CHEW: A ROTY/SOTY PLAYLIST
(20 FOR 16)
Beer and Glickman collaborate on the Spot. (10/13a)
30 HAS A DATE
Your Thanksgiving weekend soundtrack (10/14a)
ADELE ADELE ADELE
Adele; Adele Adele?
ADELE ADELE ADELE ADELE ADELE ADELE
A... dele?
ADELE ADELE
Adele Adele; Adele.
ADELE ADELE ADELE ADELE
(Adele.)
 Email

 First Name

 Last Name

 Company

 Country
CAPTCHA code
Captcha: (type the characters above)