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Published On: Mon, Sep 24th, 2018

SiriusXM to Buy Pandora in $3.5 Billion Deal, will close in 2019

Subscription radio company SiriusXM is buying music-streaming firm Pandora Media Inc. in an all-stock deal the companies said they value at about $3.5 billion. For every share of Pandora they own, shareholders will get 1.44 of newly issued shares of Sirius XM, the companies said in their announcement Monday.

SiriusXM has 36 million subscribers in North America. It was formed with the merger of the Sirius and XM satellite radio services in 2008.

Acquiring Pandora would make SiriusXM the world’s largest audio entertainment company, with more than $7 billion in combined revenue expected in 2018. The deal would bring together SiriusXM’s 36 million subscribers in North America and Pandora’s more than 70 million monthly active users.

CNBC summarized that “Shareholders will receive 1.44 of newly issued SiriusXM shares for each Pandora share they hold, the companies said. The implied Pandora price from this deal is $10.14 a share, or a 13.8 percent premium over a 30-day volume-weighted average price.”

photo/ Gerd Altmann via pixabay

The Journal noted that “Sirius XM last year invested $480 million in Pandora, which now represents a stake of about 15% in the music-streaming company. John Malone’s Liberty Media Corp. owns a controlling interest in Sirius XM.”

Evercore ISI analyst Anthony DiClemente said he wouldn’t rule out a higher bid for Pandora from a tech giant, but he believes “Apple and Spotify have had a chance to look at Pandora already.”

“I do think once the market kind of gets a better feel for what the strategy is at the SiriusXM level, then we’ll start to see the stock normalize,” DiClemente said on CNBC’s “Squawk Box.”

SiriusXM expects the deal to close in the first quarter of 2019.

About the Author

- Roxanne "Butter" Bracco began with the Dispatch as Pittsburgh Correspondent, but will be providing reports and insights from Washington DC, Maryland and the surrounding region. Contact Roxie aka "Butter" at [email protected] ATTN: Roxie or Butter Bracco

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