SiriusXM purchases Pandora for $3.5 billion

Lloyd Doyle
September 24, 2018

Still, Pandora has found itself in a hard position in the streaming market as alternatives like Apple Music (aapl) and Spotify (spot) continue to attract more members.

Supporting and strengthening Pandora's brand.

Pandora has been trying to mark its position in an industry where competitors are routinely adding new features, giving away discounts and offering more content, including interviews with popular musicians.

Creating a promotional platform for emerging and established artists, curated and personalized in ways to deliver the most compelling audio experience that connects artists to their fan bases, as well as new listeners.

SiriusXM said the deal would create the "largest digital audio audience" in the U.S. The satellite radio company has more than 36 million subscribers across North America and 23 million-plus annual trial listeners.

In a statement, Meyer said, "We believe there are significant opportunities to create value for both companies' stockholders by combining our complementary businesses".

Pandora shares rose 9.5 percent to $9.95 in early US trading. It's not yet clear how or if the strategies of SiriusXM and Pandora will change in light of the acquisition, but Pandora CEO Roger Lynch said, "There's no shortage of ideas that [SiriusXM CEO Jim Meyer] and I have had on things we can do together, everything from the content side to things we can bundle in the auto". Six million users pay for Pandora's premium services, according to the company's most recent earnings report. Since anticipation of a SiriusXM purchase started bubbling up, Pandora stock doubled in price. Pandora's revenue for the third quarter is expected to be between $390 million and $405 million. Sirius XM owns about 15% of convertible preferred Pandora stock.

The merger agreement provides for a "go-shop" provision under which PANDORA and its Board of Directors may actively solicit, receive, evaluate and potentially enter negotiations with parties that offer alternative proposals following the execution date of the definitive agreement.

The deal was announced on Monday, September 24, and SiriusXM expects that everything should be finalized around the first quarter of 2019. Pandora offers both free and paid streaming and relies on an algorithm and user input to curate tracks.

Other reports by Iphone Fresh

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