Napster Group PLC (AIM:NAPS, OTC:EVVRF) is exiting the London market just months after arriving, as the Rhapsody subsidiary is sold off for US$45.6mln.
The music entertainment group, which superseded the MelodyVR brand-name earlier this year, announced today plans to cease trading on the London Stock Exchange (LSE) in the new year.
The de-listing is expected to commence as soon as the proposed disposal of Rhapsody, the major subsidiary of the group which contains almost all Napster’s assets and liabilities, to NM Inc for US$45.6mln is completed.
The disposal is due to complete in January, and, it is envisaged that the music streaming brand will re-emerge in the United States in a fresh vehicle by 2023.
Executed as a buy-out, it is something of an indictment of London’s appeal as a domain for tech capital – made all the more awkward by its timing alongside new City rules that are supposed to make the square mile more attractive and competitive with the US.
Napster is expected to operate as a private company until its American reboot as its continuing management team believe the business will have greater access to growth capital than it would if it remains quoted in the UK.
The music streamer believes it is more US centric, citing nearly half of its revenues coming from North America for the first half of 2021.
As a result, a listing in the US “is appropriate for the Napster Business and most beneficial for all stakeholders.”
The transaction will leave the remaining shell with “negligible assets” which would not justify costs associated to remaining as a listed business.
In London, Napster shares tanked, falling down 51.56% to 0.38p.