Pandora Refuses $3.4 Billion Offer From Sirius XM Owner

Pandora, the online radio streaming service, turned down a $3.4 billion acquisition offer from Liberty Media recently, the company that owns the Sirius XM satellite subscription radio service, according to The Wall Street Journal.

Liberty Media was offering $15 per share for Pandora, which was “significantly” higher than the price Pandora stock was trading at at the time.

Pandora stock closed at $11.99 a share on Thursday (July 21).

WSJ reported that Pandora was seeking around $20 a share and was in the process of shopping itself around to larger companies, like Amazon and Apple.

A source described Liberty Media’s offer, broached by CEO Greg Maffei, as more of a “fishing expedition” than a formal proposal.

Pandora’s stock was trading as high as $21.98 on Oct. 6, 2015, and reached an all-time high of $37.42 in Feb. 2014. It was trading at about $8 a share in February.

Pandora has about 80 million listeners, who mostly use the service on their mobile phones or tablets, and generates most of its revenue from advertising, but it has struggled of late against a host of online streaming service competitors.

Which is an entirely different business model than Sirius XM, of which Liberty Media controls a 64 percent stake.

Sirius XM has built a profitable business by charging its more than 30 million subscribers a fee of about $15 a month to listen to its content, including popular exclusive content, like Howard Stern’s show on the satellite radio platform.

Maffei and Liberty Media’s offer to Pandora could be a sign that it is becoming worried about its Sirius XM business model in the face of increasingly free or cheaper streaming services offered online or through mobile apps.

A Pandora/Sirius XM partnership could be an interesting marriage for both brands, but it remains to be seen if Liberty Media will up its offer before Pandora can find a better suitor.