Shares of music e-tailer CDNow more than doubled Friday after the company confirmed it will announce a merger partner or investor by the end of the month.
CDNow first said it would seek a transaction on March 13. The company said more than two dozen companies initially expressed interest, and it has now hashed out a short list of prospective merger partners and investors with the help of investment bankers Allen and Co. and Deutsche Bank Alex. Brown. CDNow’s management team is currently in the process of meeting with each of those parties, the company said.
“CDNow is the number one music site on the Internet and has attracted a number of interested investors,” said Jason Olim, president and chief executive officer.
“We are on schedule with our investment process and we expect to announce a deal with a merger partner/investor by the end of this quarter.”
To grease the wheels, CDNOW has revised its operating plan and said it is on target to reduce expenses by more than $12 million for the quarter. And, despite the scaled-back spending on marketing, CDNow said it averaged 4.7 million unique users per month in the three-month period that ended in April. That amounts to a 6.3 percent increase over the previous three-month period.
Also, CDNow has continued to enhance its site. On Thursday it launched an improved shopping cart that is simpler to use and creates opportunities to upsell other products and offer advertisers a highly trafficked space, the company said. On Tuesday, it launched CDNow Radio.