Beats eyes deal to ditch HTC, find new investor -- report
HTC currently owns about 25 percent of Beats, which is down from its 50 percent stake acquired in 2011.
Beats Electronics, the company behind the wildly popular Beats headphones, is looking to get rid of its minority owner.
The company, which is headed up by music bigshot Jimmy Iovine and rap legend Dr. Dre, is holding talks with an investor to raise cash through debt financing and an equity offering to buy out HTC's stake in its operation, The Wall Street Journal reported on Monday, citing people who claim to have knowledge of the company's plans.
HTC acquired 50 percent of Beats in 2011 for $300 million. Last year, HTC sold back half of its stake for $150 million, leaving it with about 25 percent ownership in Beats. HTC has integrated Beats technology into several of its smartphones. It's not clear whether that integration would continue after a possible buyback.
According to the Journal, Beats' desire to ditch HTC might have quite a bit to do with its recent success. The Journal's sources say that while Beats generated $200 million in revenue in 2010, the company was able to boost that to more than $1 billion last year.
The Journal's sources say that Beats has been trying to shake HTC for months and actually went to the handset maker earlier this year to see if it could buy back its shares. So far, however, HTC has seemingly been unwilling to completely exit the picture.
CNET has contacted HTC for comment. We will update this story when we have more information.