What’s a cable-based music service worth these days?
Ahead of the weekend, Canadian-based firm Stingray has made an unsolicited offer to acquire rival Music Choice for $120 million. But that deal has a time limit attached.
Music Choice is a conglomerate owned by several companies including Charter Communications, Cox Communications, Comcast, Sony Corp. of America, A&T, EMI Music Publishing, Microsoft, and Arris.
According to a Stingray representative, the bid-offer has not been accepted and is currently under review. The conglomerate of owners has until August 31st to accept the unsolicited offer.
If you’re unfamiliar with MC, it first debuted back in 1991 as an easy way to offer genre-themed audio channels to listeners. Its music channels have been available on paid TV services in the United States for years, which helps cable companies pad their channel offerings and explains why so many cable companies are holding partners in the service.
Eric Boyko, founder and CEO of the Canadian company, says he believes the buyout offer would be beneficial for MC’s owners.
He believes his company will be able to expand the company’s portfolio of channel offerings for the United States and around the world. This newest buyout offer isn’t the first time the two companies have gone head-to-head, either.
In 2016, Music Choice sued Stingray for patent infringement. The Canadian company has asked the US Patent & Trademark Office to review these patents in an attempt to get them invalidated. Perhaps this buyout offer is an attempt to absorb the company to avoid settling the lawsuit between the two companies. Either way, it seems as though August 31st is the magic date to determine what will happen with this hostile takeover bid.
To its credit, the Canadian company boasts more than 400 million users in 156 countries and says its mobile apps have been downloaded more than 90 million times. Boyko says he believes the buyout offer contains favorable terms for all holders involved to make the proposal more palatable to MC’s owners.