LONDON, UK / ACCESSWIRE / June 13, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Sirius XM Holdings Inc. (NASDAQ: SIRI) and Pandora Media, Inc. (NYSE: P). SiriusXM Holdings announced on June 09, 2017, that it has signed a definitive agreement, pursuant to which, it would make a $480 million strategic cash investment in Pandora Media. With this agreement, SiriusXM is going to make an investment in the leading US provider of an ad-supported digital radio. Pandora Media serves nearly 100 million listeners in the US and is by far the leading player in the digital audio advertising market. For immediate access to our complimentary reports, including today's coverage, register for free now at:

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Details of the Agreement

Under terms of the agreement, SiriusXM will purchase an aggregate of $480 million in the newly issued Series A convertible preferred stock of Pandora. Post the execution of the agreement, SiriusXM has purchased $172.5 million of Series A preferred stock and has agreed to purchase the balance of Series A preferred stock at the second closing. The Series A preferred stock represents a stake of 19% in the Pandora's currently outstanding common stock and has a 16% stake on an as-converted basis. The investment provided through the SiriusXM will allow Pandora to capitalize on opportunities in the streaming radio business.

When the deal closes, three chosen individuals by SiriusXM will be named to the Pandora Board of Directors. One out of these three will serve as Chairman and SiriusXM appointed directors would serve as Board committee representatives. After this selection, Pandora Media will be expanded to have nine directors. SiriusXM will be restricted from acquiring additional securities of Pandora for 18 months.

After this span, SiriusXM has agreed to terms about not acquiring more than 31.5% of Pandora's equity securities without the approval of Pandora's Board of Directors. On May 2017, Pandora struck a deal with a private equity group, namely KKR, for $150 million. Post this investment, Pandora agreed to terminate their investment agreement with Kohlberg Kravis & Roberts and has agreed to pay Kohlberg Kravis & Roberts, a termination fee of $22.5 million.

Prospects of the Transaction

On May 08, 2017, a strategic review was started in which Pandora's Board and management scrutinized the alternative strategies committed to enhancing stockholder value while the investment from SiriusXM was viewed as a conclusion to this review. With this investment, Pandora Media Inc. will gain the backing of one of the media industry's most successful investors and possess the significant capital to accelerate growth.

The investment from SiriusXM proved to be a good news for investors as this transaction ensures that Pandora stockholders get the benefit of additional capital from an important strategic investor which could uplift the cash-deprived Company. Pandora has been facing sluggish user growth and advertising sales amid rising demands by shareholders to view a potential sale. In May 2017, the Company revealed that its cash pile had depreciated to $203 million at the end of Q1 FY17 versus $243 million at the start of the year and $383 million at the end of Q1 FY16.

Pandora Media also announced the sale of its Ticketfly business to Everbrite for $200 million. The Company bought the Ticketfly business in 2015 for about $450 million. This deal will bring $150 million in cash and $50 million in notes and is expected to be completed in Q3 FY17.

About SiriusXM

SiriusXM is the world's largest radio Company in terms of revenue and about 31.6 million subscribers. The Company views this agreement as a definite expansion strategy in the online radio business, where it currently holds no position. Pandora Media's large user base and their specialty to deliver personalized music to listeners are complementary to SiriusXM's growth strategy and will enable it to avail the online subscribers of Pandora. Additionally, Pandora Media's strong technology and new product offerings would accelerate its growth and increase value for Pandora Media's and SiriusXM's stockholders.

Last Close Stock Review

On Monday, June 12, 2017, the stock closed the trading session flat at $5.20. A total volume of 24.83 million shares have exchanged hands. Sirius XM's stock price soared 7.66% in the last one month, 14.54% in the past six months, and 32.65% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have surged 16.85%. The stock is trading at a PE ratio of 32.30 and has a dividend yield of 0.77%. At Monday's closing price, the stock's net capitalization stands at $23.90 billion.

At the close of trading session on Monday, June 12, 2017, Pandora Media's stock price tumbled 7.63% to end the day at $7.87. A total volume of 31.00 million shares were exchanged during the session, which was above the 3-month average volume of 10.46 million shares. At Monday's closing price, the stock's net capitalization stands at $1.90 billion.

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