Pandora pushes back deadline for KKR deal to explore its options

The countdown for a possible sale of Pandora Media was extended Thursday, as the company weighed investments from private-equity firm KKR and an unnamed “strategic investor” that may well be Sirius XM.

The Oakland company, which has struggled to hold on to its position as one of the dominant outlets for streaming music, struck a deal a month ago in which KKR would invest $150 million through a purchase of convertible preferred stock.

Under that agreement, Pandora had the right to terminate the deal within 30 days if it found a buyer for the company. That deadline arrived Thursday.

Early Thursday, Reuters reported that Sirius XM was in discussions with Pandora for a minority investment, after talks for an acquisition failed over the price. Neither company would comment on that report.

But Pandora said that it had extended its deadline to terminate the KKR investment “to explore interest expressed by a strategic investor in making a substantial minority investment in Pandora, in lieu of the KKR investment.”

Pandora did not specify a new deadline in its statement, and a spokesman did not respond to a question about it.

For Pandora, a new owner or a source of significant new investment may be essential. The company, long the biggest force in Internet radio, has seen its user base erode over the last few years as listeners have headed to Spotify, Apple Music and other outlets. In March, Pandora introduced Pandora Premium to compete with those companies.

Last year, Pandora had a net loss of $343 million — up from nearly $170 million in 2015 — and in the first quarter of this year, it reported the lowest number of active monthly listeners in more than two years, at 76.7 million.

The company’s stock is down about 33 percent this year, putting its market capitalization around $2 billion.

For a year, Wall Street has speculated that Sirius XM, the satellite radio broadcaster, would purchase Pandora. The combination, as many analysts see it, could greatly expand Sirius XM’s advertising business and give it a stronger position in Internet-connected cars, where Pandora is popular but Sirius XM’s satellite radio business is threatened.

Top executives at Liberty Media, the cable and media giant that owns a majority of Sirius XM’s stock, have stoked much of that speculation. CEO Gregory Maffei has said repeatedly that he is interested in Pandora, but only at the right price; perhaps as a result, Pandora’s share price has been on steady decline.

A spokesman for Liberty Media did not immediately return a request seeking comment.