Is SiriusXM Considering Acquiring Pandora

Is SiriusXM Considering Acquiring Pandora

Pandora says it’s open to an acquisition by SiriusXM.  Wall Street thinks that’s a great idea.

Pandora could soon be acquired by satellite radio giant, according to wild rumors flying around.  Well, maybe not so wild: shares of Pandora are flying high on the news, surging more than 16% in recent hours.

The information about the possible acquisition is coming from reputable sources:

1. CNBC has just reported that Pandora is “open to engaging in talks with longtime suitor SiriusXM,” citing unnamed Wall Street sources.  But, they also said this was the ‘first inning of the process‘.

2. Bloomberg says that Pandora was directly approached on a sale last week by Liberty Media Corp. CEO Greg Maffei. That’s the owner of SiriusXM. The offer, according to Bloomberg, was for $15 a share.

3. The Wall Street Journal corroborated that point.  But it also pointed to a possible ‘fishing expedition,’ and a price that could shift.

4. Reuters says Pandora is making ‘no effort to sell itself’.  But that sort of sounds like Pandora trying to calm the leak.

5. Pandora is not offering any comment.

No one knows exact what will happen next, but here are a few things to consider.

The Journal pointed to a rejected bid back in July.  But, keep in mind that Pandora has had a major management overhaul since that point.  Most important, original co-founder Tim Westergren is back in the CEO chair, after the board bid adieu to Brian McAndrews.

SiriusXM CEO Jim Meyer has indicated that the acquisition would help the satellite radio giant expand its share of the radio market.  But, there are massive complications with the acquisition, including massively higher royalty costs.  Those differences are largely rooted in arcane copyright law, a huge point of contention for Westergren.

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