Pandora Shareholders May Reject SiriusXM Offer, Analyst Says
SiriusXM stock's 10.3 percent fall Monday led Wedbush Securities' Michael Pachter Tuesday to forecast shareholders will reject the $3.5 billion takeover (see 1809240047). “Given that the exchange ratio is fixed,” the implied deal price was just above $9 a share,…
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
nearly 1 percent below Pandora’s closing Friday, the analyst wrote investors. The companies didn’t comment. Sirius “could have easily divested a large cash component," said its Chief Financial Officer David Frear when asked on a Monday conference call why the deal was structured as all-stock. “The trouble with a cash component is you’re reducing the equity upside for Pandora shareholders.” Pachter rates the deal a win-win nonetheless for both partners. In light of Pandora’s “history of losses” and the “intense competitive environment” in the streaming-music space, Dougherty's Steven Frankel rates the “offer as fair” for Pandora shareholders. Frankel doesn't expect “competing bids.” Pandora can walk if it pays Sirius $105 million in termination fees, said an SEC filing Monday. That “was an important component for our board,” said Pandora CEO Roger Lynch.