Pandora opens PE box
Pandora Media may team up with a private equity firm in exchange for cash to help expand the business, The Post has learned.
The streaming radio stalwart has been in talks with Providence Equity Partners, Silver Lake and KKR, among others, sources said. Chief Executive Tim Westergren just launched a paid on-demand service and has ambitions to roll it out beyond North America — but needs cash to pay hefty royalties to music labels.
The conversations might indicate that Pandora has given up on a sale, but sources say that door is still open and talks about a strategic investment are happening in tandem.
Pandora hired Centerview Partners last July to explore its strategic options. A bidder is yet to emerge — publicly at least. Liberty Media boss Greg Maffei has expressed interest, but at a price below Wednesday’s $11.02 close, down 1.1 percent. Liberty Media owns Sirius XM.
Pandora also has been in talks with label partners about taking an equity stake. The labels own a collective 10-percent stake in Pandora rival Spotify.
One industry source said the labels are reluctant to see another free music brand take off internationally but want to support a broad spectrum of services.
“There are only so many slots for successful streaming services,” said one music expert, adding that the labels are expecting consolidation in the streaming space.
“A strategic buyout or a partnership is inevitable,” the source said.
Another source chided the labels for wanting to be the “only guys who make money.”
Pandora shareholders are expected to vote Friday on the re-election of Westergren and fellow director Tony Vinciquerra to the board. The company has extended the election period in previous weeks.