As if 99 problems weren't enough for Jay Z.
Now the rapper's bid to buy Swedish streaming music company, Aspiro, is being blocked by minority shareholders. In January, Jay Z agreed to a $56 million deal to buy Aspiro, the company behind music services WiMP and Tidal. But now that deal looks unlikely to go through.
Though the Aspiro board unanimously recommended accepting the acquisition, only 10 percent of shareholders are needed to block the deal. Sune Karlsson, chairman of the shareholder's equity association, Aktiespararna, told the Swedish business paper: "We will recommend our members say no to the offer. We have accumulated more than 10 percent of the owners, which is enough to block it."
The offer was made by Jay Z's holding company, Project Panther Bidco on Jan. 31 and is due to expire on March 11. The shareholders blocking the deal previously said that the bid undervalues Aspiro and have questioned how much money the rapper is willing to invest in order to expand the company internationally.
The Aspiro board said it is surprised by the Aktiespararna recommendation and has no evidence that 10 percent of shareholders will vote against the deal. "To not accept the offer involves high risk, as it is well known that Aspiro is currently unprofitable and in need of capital within 12 months," Fredrik Bjørland, chairman of the Aspiro board told The Next Web. "We thus believe accepting a 60% bid premium is a far better risk/reward recommendation."
The bid premium is the additional amount an acquirer has to offer above the pre-bid share price in order to succeed in a take-over offer. Essentially, the board is saying that they believe the company is worth more money but they need the cash right now and therefore have to accept the offer.
WiMP is currently only available in Norway, Denmark, Sweden and Poland, but Tidal was launched in the U.K. and the U.S in 2014. Tidal's selling point is that it streams very high quality audio. The $20 per month subscription is double what competitors like Deezer and Spotify charge, but the company is going after a market that is willing to pay extra for sound quality.
If the deal is rejected, Jay Z will have to wait even longer to compete with fellow rapper Dr. Dre, whose Beats company was bought by Apple for $3 billion in 2014.
Photo: Elsa | Getty Images
UPDATE: Jay Z has purchased the music streaming firm, Aspiro
