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PANDORA STOCK STARTS TO BOUNCE BACK AFTER SIRIUS/XM DEAL

Share prices of Pandora were rising Friday morning after SiriusXM announced it would invest $480m in the music streaming service. The stock rose to $8.96 per share an hour after the NYSE bell rang, a rise of nearly 6.5%.

The investment gives Sirius XM, owned by John Malone’s Liberty Media, a 19% stake in Pandora. SiriusXM is limited in terms of how much more it may further invest; the company can acquire up to 31.5% of Pandora without the approval of the Pandora board.

By making a deal with SiriusXM, Pandora bid farewell to a pending deal with private equity firm Kohlberg, Kravis & Roberts. Terminating that agreement, which was set to close Thursday, will cost Pandora $22.5m.

In a letter to employees published by Variety, Sirius XM CEO Jim Meyer wrote, “To be clear, this is a smart financial decision – it is not a merger or business combination. As such, it’s business as usual for us at SiriusXM. You should stay focused on delivering our unparalleled exclusive content and compelling bundle of audio programming, as well as our array of connected vehicle services. We will continue to succeed by providing the best service and content, building our subscriber base, and delivering strong financial performance.”

Pandora CEO and founder Tim Westergren issued a statement that read, “With the strategic review behind us, and a strong balance sheet, we look forward to focusing on business execution and the optimization of our strategy.”

Pandora will also sell its ticketing business, Ticketfly, to the online ticketing company Eventbrite, in the interest of focusing on its core advertising and subscription business. Eventbrite is getting the service for $200m; Pandora paid $309m two years ago.

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