Apple rival digital music vendor Roxio has arranged $22.5 million in equity financing, the company announced last night.

"Roxio has entered into definitive agreements with independent accredited institutional investors relating to a private placement of 5.5 million shares of Common Stock of the company at a price of $4.10 per share for aggregate gross proceeds of approximately $22.5 million. The parties expect to close the private placement on or about January 13, 2004," the company said.

Roxio will use the money to "expand its activities in the digital media sector," it said.

In related news, Roxio confirmed that its Napster digital music distribution brand has arranged a deal with musician Tom Petty so it can sell some of his tracks, including 'Refugee'.

Despite the news, company shares closed at $4.50 last night, down 6.64 per cent. Roxio continued its slide, losing another 5 cents on the after hours trading market where its value stands now at $4.45.