Suitor LaunchEquity is already the music software company's largest shareholder, with a 28 percent stake.
MakeMusic Inc., an Eden Prairie-based company that makes music software, said Monday that venture capital fund LaunchEquity Partners has made a bid to acquire all of MakeMusic's operating assets for $13.5 million.
The offered price presents a 20 percent premium to the company's closing share price Friday.
Scottsdale, Ariz.-based LaunchEquity is MakeMusic's largest shareholder, controlling about 28 percent of common shares. MakeMusic said in a news release that it has appointed a special committee of independent directors to consider the proposal, and that the alternatives include continuing as an independent public company.
The company's shares rose 49 cents on Monday, or 14 percent, to close at $4.08.
In its July 15 proposal to MakeMusic's board of directors, LaunchEquity said MakeMusic isn't making enough money, needs aggressive strategic leadership and has stifled its ability to attract new institutional shareholders by adopting a 4.9 percent "poison pill" provision earlier this year.
MakeMusic also faces significant competition from Hal Leonard Corp., a major print music publisher entering the digital music software market, it said.
LaunchEquity said it would inject at least $10 million over the next two years.
MakeMusic, which makes the widely used Finale family of software products, lost $840,000 in the first quarter, according to documents filed with the government.
In June it announced that its latest CEO, Karen van Lith, was leaving the company and Karen VanDerBosch would serve as interim CEO until a new one is found.
Jennifer Bjorhus • 612-673-4683