CDNow may not find buyer, premium as shares fall

Shares of CDNow (Nasdaq: CDNW) fell 25 percent Thursday after the company said it couldn't guarantee it would have a buyer by June 30, or that an acquirer would pay a premium.

CDNow was off 1 1/16 to 3 7/32 in early afternoon trading.

CDNow, a leading music e-tailer , said after the bell Wednesday that "there can be no assurance that an offer will be received or consummated prior to June 30, or at any time."

That statement wasn't new, but CDNow took an additional step and noted that "if an offer is received, the price of an offer may be below the current market price of CDNow common stock."

CDNow has gyrated based on takeover speculation, much of it fueled by company press releases. CDNow rocketed in early June after the company it expected to find a strategic investor or buyer by June 30. In a June 2 statement, the company said it had more than two dozen companies interested. CDNow added that it had "a short list of prospective investors and merger partners."

A day later, CDNow backtracked. In a June 3 statement, the company said was in discussions with five different groups. CDNow added that it hasn't agreed to terms, but had "requested final proposals from interested parties in order to be able to reach an agreement on a transaction by the end of June."

In other CDNow news, the company said Patrick Kerins has resigned from the board of directors. Kerins, managing director of the Grotech Capital Group, was one of CDNow's original investors. He resigned because he no longer had the time.

CDNow is one of many dot-coms looking to partner to keep its business going. Pets.com (Nasdaq: IPET) merged with Petstore.com on Tuesday and various companies, including Drkoop.com (Nasdaq: KOOP), Quepasa (Nasdaq: PASA) and Streamline.com (Nasdaq: SLNE), are looking for additional financing or a buyer.

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