Mexican Billionaire Buys 9% of CDNow's Stock
- 05 May, 2000 12:01
FRAMINGHAM (05/05/2000) - A Cinqo de Mayo filing with the U.S. Securities and Exchange Commission today revealed that Mexican billionaire Carlos Slim Helu has bought another 9% of the stock of struggling online music retailer CDNow Inc. for $52.8 million.
A spokeswoman for Fort Washington, Pennsylvania-based CDNow said Slim already was a stockholder in the company, but information wasn't available on what his total ownership position is after this new purchase. She also confirmed that one of Slim's business holdings - a Mexican conglomerate called Grupo Carso - has approached CDNow about a possible purchase.
CDNow, which on Tuesday reported a $37.8 million first-quarter loss and announced planned spending cuts, has been looking for a buyer since a planned sale of the company to Columbia House fell through in March. As part of the Tuesday's announcement, CDNow said it expects to find a new owner by the end of June.
Today, the CDNow spokeswoman said the company has spoken with dozens of interested parties. That list includes Grupo Carso, which owns telecommunications, mining and retail operations. "We have held discussions with Grupo Carso and may continue these discussions in the future," she said.
She described Slim's purchase of more than 3 million shares of CDNow's stock as "nothing more than an individual purchasing stock." CDNow had no advance inkling that he intended to buy more stock, she added.
According to the SEC filing, the stock purchases were made over a period of several weeks. Slim paid an average of $17.43 per share for his stock - well above the $4.78 per-share price that the stock was trading at this afternoon.