Sirius XM to Invest $480 Million in Pandora--Update

By Austen Hufford Features Dow Jones Newswires

Sirius XM Holdings Inc. will get a foothold in advertising-supported streaming music and help Pandora Media Inc. shore up its balance sheet by buying a $480 million stake in the streaming-music company.

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In May, Pandora said it would review strategic options, including a potential sale of the company, and said it struck a deal for private-equity firm KKR & Co. to make a $150 million investment.

Friday, the company said the review process resulted in the Sirius investment and the canceling of the KKR deal. KKR will get a $22.5 million termination fee.

The recorded music industry has seen its global revenue drop 60% since 2000, and it was hoping paid-streaming services would grow fast enough to make up for declining CD and download sales. Pandora launched a $10-a-month music service earlier this year amid steep competition from other streaming providers. Players like Apple Inc.'s music service and Spotify AB are grabbing subscribers.

Pandora Chief Executive Tim Westergren said the investment will help the company grow and innovate.

When the deal closes, three individuals chosen by SiriusXM will be named to Pandora's board and one will become it chairman.

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Sirius holdings represent a stake of 19% of Pandora's outstanding common shares. The satellite radio provider is restricted from buying additional Pandora shares for 18 months and won't own more than 31.5% without the approval of Pandora's board.

Write to Austen Hufford at austen.hufford@wsj.com

Sirius XM Holdings Inc. will get a foothold in advertising-supported streaming music and help Pandora Media Inc. shore up its balance sheet by buying a $480 million stake in the streaming music company.

Pandora also said that it would sell its ticketing business, pivoting away from a bet it made on directly selling tickets to fans. Online ticketing company Eventbrite Inc. is buying Pandora's Ticketfly for $200 million, down from the $335.3 million Pandora paid for it in 2015. Pandora said it entered a commercial agreement with Eventbrite to substantially broaden the scale of its ticketing opportunities.

In May, Pandora said it would review strategic options, including a potential sale of the company, and said it struck a deal for private-equity firm KKR & Co. to make a $150 million investment.

Friday, the company said the review process resulted in the Sirius investment and the canceling of the KKR deal. KKR will get a $22.5 million termination fee.

The recorded music industry has seen its global revenue drop 60% since 2000, and it was hoping paid-streaming services would grow fast enough to make up for declining CD and download sales. Pandora launched a $10-a-month music service earlier this year amid steep competition from other streaming providers. Players like Apple Inc.'s music service and Spotify AB are grabbing subscribers.

Pandora Chief Executive Tim Westergren said the investment will help the company grow and innovate.

When the deal closes, three individuals chosen by SiriusXM will be named to Pandora's board and one will become it chairman.

Sirius holdings represent a stake of 19% of Pandora's outstanding common shares. The satellite radio provider is restricted from buying additional Pandora shares for 18 months and won't own more than 31.5% without the approval of Pandora's board.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

June 09, 2017 09:58 ET (13:58 GMT)