Pandora Media Inc (NYSE:P) shares were up more than 5% this morning following reports that Sirius XM Holdings Inc. (NASDAQ:SIRI) is reviewing making a bid for internet radio company. In the three months through yesterday’s close, P stock was down more than 34%.
According to reports, there is no agreement yet on a price, a bid from the Liberty Media-backed company could range as high as $12 to $13 a share. Liberty CEO Greg Maffei said in March that he thinks Pandora is worth $10 per share. The Wall Street Journal reported last July that Maffei had made an offer for Pandora Media at $15 per share.
Activist investors — Matrix and Corvex — have pushed the company to pursue a sale. Oakland, Calif.-based Pandora continues to be run by founder Tim Westergren. Meanwhile, private equity firm KKR made a $150 million investment in the music service earlier this month.
Yesterday, Goldman Sachs analyst Heath Terry advised clients considering P stock to focus on the increasingly competitive environment in streaming music, an industry which he noted still lacks of profits.
“Given the high level of shareholder involvement and what we see as significant strategic value in Pandora’s user base, advertising inventory, data, and home screen position, we believe the likelihood of strategic action remains high,” Terry wrote in the note, according to Barron’s.
Pandora reported 1.3 million trials of its on-demand products in the first quarter and a 6% rise in revenue, to $316 million. Active listeners fell, to 76.7 million from 79.4 million a year ago.