CNBC is reporting there’s truth to the rumors that SiriusXM Holdings Inc. (NASDAQ:SIRI) is interested in acquiring Pandora Media Inc. (NYSE:P).
The two companies were first linked in July, when Sirius’s majority owner Liberty Media Group (NASDAQ:LMCA) approached Pandora about a possible takeover offer at $15.00 per share. The music streaming company promptly rejected the bid, believing it could get a higher price from other suitors.
Pandora has since changed its tune. The company is more interested in making a deal, and has unofficially put itself on the market. Sirius is said to be among the interested parties, but according to one inside source, talks are very preliminary, describing progressing as being in "the first inning."
Corvex Management, which is Pandora’s fifth-largest shareholder, has been putting pressure on the company to sell itself. Two other large institutional shareholders have joined Corvex in expressing their frustration to Pandora’s board.
These shareholders may be onto something. Since Pandora shares peaked at nearly $40.00 back in the first part of 2014, they’ve stumbled badly, falling more than 60%. Additionally, Pandora hasn’t posted a profitable year in its life as a publicly traded company.
The music streaming business has become more competitive of late, with Apple, Google, Amazon, and others moving into the space in the last couple of years. Having the backing of Liberty would be advantageous for Pandora in such a competitive world.
Pandora shares shot higher on this news, increasing nearly 13% in Friday’s trading, up $1.45 to $12.93.
