Internet radio shake-up in the air

Sirius XM Holdings chairman Greg Maffei recently approached Pandora Media’s board to express renewed interest in a takeover of the internet radio provider, according to people familiar with the matter, following up on its offer from earlier in 2016.

Sirius’s latest approach did not include a price for Pandora, said one of the people, who asked not to be named because the discussions are private. Sirius offered about $15 per share to acquire Pandora earlier in 2016, the person said.

Pandora had not yet responded to the Sirius approach, the person said. Still, Pandora’s advisers had begun reaching out to other potential suitors, another person said.

Pandora shares rose on Friday after a CNBC report that the company was willing to engage with Sirius. They closed 16% higher at $13.33, valuing the company at about $3.1bn. Sirius fell 5.6% to $4.30, giving it a market value of $20.8bn.

Representatives for Pandora and for Maffei declined to comment. A Sirius spokesman did not immediately respond to a request for comment.

Since Sirius made its first approach, Pandora has taken steps to shake up its business model as it seeks to placate activist investor Corvex Management. The company hired Centerview Partners to advise on strategic options, people familiar with the matter said in July. Centerview’s role could be expanded to run a sale process with Morgan Stanley for Pandora, the people said.

Though Pandora dominates the online radio market it pioneered, the company’s growth has slowed in recent years at the same time as ondemand services Spotify and Apple Music have added millions of users.

CEO Tim Westergren is trying to almost quadruple sales to $4bn by 2020 by going into new businesses, such as ticket sales and concert promotion, while converting free users into paying customers.