Shares of internet radio pioneer Pandora (NYSE:P) gained nearly 10% in morning trading Friday after reports surfaced that the company was now open to selling itself to former suitor SiriusXM (NASDAQ:SIRI) . According to CNBC, people familiar with the matter confirmed that SiriusXM is expected to pursue the deal.
Back in July, Pandora rejected an informal $15-per-share takeover offer from SiriusXM and its majority owner, Liberty Media (NASDAQ:LMCA) . Pandora has continued to face pressure to sell itself from activist firm Corvex Management.
Liberty Media’s CEO Greg Maffei has also been open about his desire to do business with Pandora. “We think that the free space, whether it be commercial terrestrial radio, or Pandora, is still a very attractive space,” Maffei told CNBC recently.
Today’s rumors have certainly sent Pandora’s stock soaring, but any potential deal still seems like a long way away. One person cited in CNBC’s report suggested that the deal was still in “the first inning of the process.”
Shares of Pandora closed at $11.48 on Thursday, which means that Liberty’s previous $15-per-share offer still doesn’t seem outrageous. Nevertheless, it will be interesting to see what kind of price tag Pandora is putting on itself.
These types of situations typically depend on whether the two companies are anywhere near each other on pricing. If Pandora is setting its sights too high, the conversation with Liberty and SiriusXM could be over quickly. However, Maffei and his company have expressed a clear interest, which means that we could see something materialize here.
A Pandora sale would also add another wrinkle to the ever-changing music streaming landscape. With Apple’s (NASDAQ:AAPL) Apple Music taking off and Spotify probably set for an IPO in 2017, things are really getting interesting in this sphere.
Stocks that Aren't in the News. Yet.
You are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street. They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015 with a stellar average gain of +26% per year. See these high-potential stocks free >>
SIRIUS XM HLDGS (SIRI): Free Stock Analysis Report
APPLE INC (AAPL): Free Stock Analysis Report
LIBERTY MEDIA-A (LMCA): Free Stock Analysis Report
PANDORA MEDIA (P): Free Stock Analysis Report
Original post
Zacks Investment Research