Internet music services provider Pandora Media explores sale
09 May 2017
North America Internet music services provider Pandora Media, Inc. is exploring strategic alternatives, including a sale.
The announcement came on the same day when private equity firm KKR & Co agreed to invest $150 million in the music streaming service.
Hedge fund Corvex Management, which holds a 9.8-per cent stake in Pandora Media has been urging the company to explore a sale instead of planning a "costly and uncertain business plan." Corvex has also been pressing for changes to the company board.
Pandora shares have fallen by more than 25 per cent last year and more than 45 per cent year-over-year.
The California-based company is facing tough competition from music-streaming rivals such as Spotify, Apple, Google and Amazon.com.
Last October, Pandora management outlined its growth plans and estimated that revenue would be $4 billion by 2020. The company generated revenue of $1.36 billion in 2016.
"We believe there is likely to be significant strategic interest in the company at a substantial premium to the company's recent stock price," Corvex said in a letter to the company, and added that potential buyers like large internet companies, handset makers and media companies could be interested.
Pandora said that it is committed to achieving long-term value for shareholders.
"Pandora has a profitable core business, combined with a strong balance sheet. We are confidently investing to fully capture the massive opportunity ahead of us," the company said in a statement.
Pandora Media provides Internet music platform services in North America. The company allows its listeners to create personalised stations to access music to access music and comedy catalogs, as well as personalized playlist generating system.