Pandora Media Inc (NYSE:P) stock is up 16% today as sources reveal to CNBC that the company is not only open to sell but is engaged with Sirius XM Holdings Inc. (NASDAQ:SIRI) specifically, after having rejected bids from the satellite radio company to acquire the music streaming service back in July.
Pandora stock has experienced a change of tune it seems, reversing its position from July when P stock’s board rejected a $15.00-a-share offer from Sirius XM’s majority owner Liberty Media Corporation’s (NASDAQ:LMCK) CEO Greg Maffei. Since falling to about $11.50 a share, Pandora stock has begun to once more field offers for its acquisition, though sources tell CNBC that this is the “the first inning of the process” and there is no guarantee that Pandora will reach a deal with Sirius XM or any other company. (Source: “Pandora now open to a SiriusXM takeover after rejecting offer in July,” CNBC, December 2, 2016.)
In contrast, Reuters released a brief today claiming that “Pandora is making no new effort to sell itself; Co is focused on executing its strategy and its operating model,” again according to an unnamed source. (Source: “BRIEF-Pandora is making no new effort to sell itself; Co is focused on executing its strategy and its operating model – source,” Reuters, December 2, 2016.)
In any case, the buzz surrounding the potential sale has boosted Pandora stock 16% while Sirius XM’s SIRI stock has faced the opposite, falling 5.6% today.
“We think that the free space, whether it be commercial terrestrial radio, or Pandora, is still a very attractive space,” Maffei told CNBC last month. “And we talked about how we’d like to find a way to participate. I think the streaming business, which Pandora seems to have doubled down on, is a very unattractive business. So there are parts of Pandora that could be attractive. And there’s parts that we’d have questions about.”
CNBC reports that much of the action surrounding the possible sale of Pandora stock revolves around activist investor Corvex Management, a hedge fund run by Keith Meister.
“Despite its many strengths, the company has been unable to date to translate its great product into a great business with an attractive public market valuation,” Corvex wrote in a letter earlier this year. The group controls 9.9% of Pandora stock directly and through options.