Pandora pops on deal talk
Pandora Media shares surged 3 percent Friday on speculation that founder and Chief Executive Tim Westergren might be prepping a sale of the company.
The struggling music-streaming service delayed a deadline for nominating dissident board directors to March 17 from this week — a move some investors interpreted as signaling a possible deal.
Shareholder support for a takeover is now so high that BTIG analyst Rich Greenf ield predicted in a Thursday research note t hat, without a sal e, Westergren risks losing his board seat at the company’s annual meeting.
Also calling for a sale is Keith Meister of Corvex Management, which owns about 10 percent of Pandora.
Last May, in a blistering letter to the company’s board, the former Carl Icahn protégé urged the radio streamer to hire an investment bank to assess takeover interest.
Pandora tried to placate Meister by retaining Centerview Partners to weigh strategic options. Nevertheless, Pandora rejected an informal $15-a-share offer from SiriusXM Radio over the summer.
The stock has since languished below $13, closing Friday at $12.75 even with its bullish bump.
Sirius, with the backing of majority owner Liberty Media, is still considered the most likelyy partner for Pandora — a dealal that would combine Pandora’s 81 million users with Sirius’ automobile-dominant 31.3 million subscribers.
But Liberty Media’s Gregg Maffei indicated on Tuesday that no deal was imminent.
“Interesting asset,” he said of Pandora during Liberty’S earnings call. “But not clear the valuation makes sense — full stop.”
Greenfield’s research note took aim at Westergren with thee head-head line, “You Have Failed, Whyy Are You Not Selling Pandora Now.”
The analyst blasted Pandora’s plans to buttress its ad-supported free offering and its $4.99-a-month Pandora Plus with a subscription servicee for $10 a month.
“Launching a subscription music ser-ser vice in direct competition withwith Spotify, Apple, Amazon and YouTube is fool-fool hardy and risks straining their balance sheet,” Greenfield wrote.
Meister couldn’t be reached for comment on Friday, but in a CNBC inter-interview back in October he called Pandora “a hugely valuable piece off property for someone who wants to win in the music business.”