Pandora back in play?

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Comments made last week suggest that music streaming service Pandora could be lining up for a sale/merger.

This is by no means the first report that Pandora might end up fully in the hands of one of its major investors Liberty Media (where Liberty has a 19 per cent stake), or another Liberty Media-backed broadcaster, SiriusXM, which it controls.

Liberty’s CEO Greg Maffei is already chairman of Pandora and at a conference last week he said that there were obvious synergies between Pandora and specifically mentioned global media and entertainment outfit iHeartMedia (perhaps better known under its old ‘outdoor’ name of Clear Channel). Today, iHeart is a major operator of radio and TV stations in the US and already has a streaming music service.

iHeart operates 858 radio stations in more than 150 markets in the US, but last year underwent a significant Chapter 11 bankruptcy and restructuring of 10 billion of debt. But it still has more than $20 billion of borrowings.

Back on May 9th Maffei said that iHeart was “an attractive free-cash flow generator, and at the right price I think it would be additive to our music holdings”.  Liberty Media made a $1.2 billion proposal to acquire 1 4 per cent stake in iHeart, and would make the investment with $600 million coming from Liberty and $560 coming from SiriusXM.

However, Pandora’s CFO Naveen Chopra, while not criticising his boss Maffei, stressed that Liberty and SiriusXM did not control Pandora and that the company’s independent directors were seeking to maximise shareholder value.


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