Sirius to buy Pandora in $3.5bn music deal
Billionaire John Malone's Sirius XM is acquiring Pandora Media in a $3.5bn (€2.97bn) all-stock deal, giving the satellite radio operator an online music service to better compete with Spotify.
Mr Malone, owner of Ireland's Virgin Media, has been working to build a radio empire, complementing the pay-TV assets which helped build his fortune.
The combination will help Sirius XM expand beyond an audience that mainly listens to its programmes while driving. Sirius XM bought a stake in Pandora last year for $480m (€407m), giving the online radio company a lifeline after upstarts such as Spotify began luring away streaming music subscribers.
The all-stock deal values Pandora at $10.14 (€8.6) a share, 12pc more than Friday's closing price but way below levels of four years ago, before stock tanked as competition from Spotify and Apple intensified.
Matthew Thornton, an analyst at SunTrust Banks, called the price "underwhelming," and Pandora opened under $10 (€8.49) yesterday.
In a conference call with analysts, Pandora and Sirius XM offered little detail about how they will work together. Asked about his plan for the combined company, Sirius XM CEO Jim Meyer said: "There's real money to be made by optimising cross-promotion across these platforms. That's, if you want to know, what my gut tells me, that's where I see the biggest opportunity."