Entertainment mogul Jay Z has bid $56 million in cash to take over the developer of two music streaming apps that have sought to distinguish themselves by providing high-quality audio.
Project Panther Bidco Ltd., which Jay Z's company created to handle the purchase, announced the pending deal for Oslo-based Aspiro AB on Friday.
YouTube, Spotify, Deezer, Rdio and other streaming services have surged in popularity in recent years. Subscribers to these apps don't own the millions of songs that they have access to, but they typically can play any of them on demand and without advertisements.
Jay Z is seeking to control two apps — WiMP, available throughout Europe, and Tidal, which launched in the U.S. and United Kingdom in October.
Tidal costs about $20 a month, more than double some competitors. But it produces superior audio quality, offers music videos and includes access to music industry news.
Figures on Tidal's early adoption are expected Feb. 5. As of September, WiMP had 512,000 subscribers, including 20,000 who paid double for high-quality streams. Aspiro's revenue from its music business was up 25% last summer compared to the summer before, but did not turn a profit.
Music streaming "offers great potential for increased entertainment consumption and an opportunity for artists to further promote their music," a spokesperson for Jay Z's S. Carter Enterprises said in a statement. Jay Z, whose real name is Shawn Carter, also oversees an entertainment company that represents athletes and musicians.
Panther's bid represents a 59% premium for Aspiro shares compared to their closing price Thursday on the Swedish stock market. Shares skyrocketed 59% on Friday.
Almost 76% of Aspiro shareholders have agreed to the deal. Panther has until March 11 to reach the 90% threshold needed to finalize the deal.
Fredrik Bjørland, who headed a committee that is recommending Aspiro shareholders to take the offer, said in an email the price was "seen as attractive for all shareholders" and that Panther "is seen as a good owner…to continue its successful international expansion."