SiriusXM Again Having ‘Active Discussions’ to Acquire Pandora

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Broadcasting company SiriusXM Satellite Radio
is having “active discussions” about the potential acquisition of
internet radio company Pandora, after previously showing
interest
in bidding for Pandora last year. After those talks
stalled,
The New York Post
is now reporting that SiriusXM is
reigniting its interest in Pandora, which would grant the company
access to Pandora’s online radio service and the just-launched
on-demand “Premium” streaming service.

Pandora
Premium
itself is the result of the company’s acquisition
of key assets and employees who worked for Rdio, which Pandora
acquired in 2015
. The $9.99/month service is a competitor
to Apple
Music
and Spotify, giving listeners access to a large
on-demand library, playlist creation, unlimited skips, and no
ads, unlike Pandora’s base radio service.


Pandora’s new on-demand service, Pandora Premium

Liberty Media-backed SiriusXM is in active discussions about
making a bid for internet radio company Pandora, The Post has
learned.

The New York satellite radio company, which has exhibited
on-and-off interest in the struggling streamer, has recently
restarted talks with Pandora’s banks and is discussing the
size of a potential offer, sources said.

According to Goldman Sachs analyst Heath Terry, the
music industry is currently focused on the “increasingly
competitive environment in streaming music,” so SiriusXM might be
interested in acquiring Pandora to help beef up its Premium
streaming service and compete more directly with Apple Music and
Sirius, which are both above
20 million
and
50 million
paid subscribers, respectively. Since the trial
period opened in March, Pandora Premium has reported 1.3 million
sign-ups for the streaming service.

The specific number of those users who continued to pay for
Premium was not disclosed, but the company saw a 6 percent
revenue uptick in the first quarter. Its total active listeners
nevertheless decreased to 76.7 million from 79.4 million in the
year-ago quarter. Pandora co-founder Tim Westergren hoped to
keep Pandora away from a sale, but two of its largest
shareholders — Corvex Management and Matrix Capital Management
— have repeatedly
pushed the company in that direction
.

According to sources familiar with the talks between the two
companies, no price has yet to be agreed upon but bids could
range between $12 and $13 per share, while other sources
“immediately shot down” those estimations. Greg Maffe, the CEO
of SiriusXM parent company Liberty Media, has said previously
he believes Pandora to be worth $10 per share. On Wednesday,
Pandora’s shares closed at $8.93.