SiriusXM to Acquire Pandora

Marco Green
September 24, 2018

Soros Fund Management, which bought 7.12 million shares, worth $56.1 million, during the second quarter, will receive 1.44 newly issued Sirius XM shares for each Pandora share it owns, at an implied price of $10.14 per share, as part of the satellite-radio company's $3.5 billion, all-stock deal to buy its streaming competitor. Sirius already has a 15 percent stake in Oakland, California-based Pandora, the companies said in a statement Monday.

The proposed deal is expected to close in the first quarter of next year, Pandora said, and must first win the approval of Pandora stockholders.

SiriusXM Holdings Inc. has more than 36 million subscribers in North America, while Pandora has more than 70 million monthly active users. Such a caveat allows Pandora's board to follow its fiduciary duty to shareholders by seeking competing offers. "We believe there are significant opportunities to create value for both companies' stockholders by combining our complementary businesses".

A pioneer of the Internet radio market, Pandora couldn't fend off the likes of Spotify and Apple Music in recent years, merely releasing a direct rival for the two hugely popular music streaming services in 2017.

The all-stock transaction values Pandora at $10.14 a share, about 12 percent more than the company's closing price on Friday.

Sirius XM's chief executive said in a statement that the acquisition would boost the company's efforts to reach more listeners beyond vehicle drivers. Through targeted investments, we see significant opportunities to drive innovation that will accelerate growth beyond what would be available to the separate companies, and does so in a way that also benefits consumers, artists, and the broader content communities.

Once the deal goes through, SiriusXM will become the largest audio entertainment company in the entire world. The powerful combination of SiriusXM's content, position in the auto, and premium subscription products, along with the biggest audio streaming service in the US, will create the world's largest audio entertainment company.

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