Dr Dre's Beats plans to drop HTC, hook up with rich mate – report
Hip-hop star's headphones firm tries to ditch Taiwanese mobile maker
Beats Electronics is reportedly looking to ditch its HTC partnership and bring in a new investor with fresh funds instead.
The maker of the popular Beats by Dr Dre headphones, which is branching out into speakers, car audio systems and online music streaming, wants to find a new investor that will help the business grow, people familiar with the plans told The Wall Street Journal.
The company, founded by music mogul Jimmy Iovine and hip-hop artist and producer Dr Dre, wants a new partner to provide debt financing and possibly take a minority stake in the firm and hopes to buy out HTC's 25 per cent stake in the business.
Beats already tried unsuccessfully earlier in the summer to raise $700m in financing from credit markets to buy out HTC's stake, but investors weren't interested in the deal.
The firm later asked for a smaller debt, limiting the proceeds that would go to shareholders to $150m, but withdrew the offer when markets became more inhospitable in June on concerns about the Federal Reserve's interest rate policies.
However, markets have now recovered and Beats may look to try with investors again in Autumn, the source whispered.
The company originally sold a 50.1 per cent stake to HTC for $300m two years ago, but bought back half the stake at around half the price a year later. The partnership saw HTC using the firm's audio software in its phones and bundling its mobes with Beats headphones. ®