Liberty Media boss Greg Maffei put Pandora’s shareholders in a downbeat mood Tuesday as he cooled speculation about a merger between the streaming music service and Liberty’s majority-owned SiriusXM Radio.
“At the right price? Interesting,” the chief executive said during Liberty’s earnings call, before adding, “Not clear this is the right price.”
Pandora stock fell 6 percent, to $12.38, after Maffei played down takeover talk and questioned whether Pandora was worth its $3 billion market cap.
“Interesting asset,” he said. “But not clear the valuation makes sense — full stop.”
Sirius, which is 66-percent-owned by Liberty and has a market cap of $24 billion, unsuccessfully pitched an offer of $15 per share for Pandora last summer.
Many considered combining Pandora’s 81 million users with Sirius’ automobile-dominant 31.3 million subscribers a promising way to deliver a seamless music experience and combat rising music-licensing costs.
Deal rumors resurfaced in February after Pandora CEO Tim Westergren acknowledged his receptivity to joining a large distributor.
“If you were standing in my shoes, you’d be looking for distribution there all day long right now,” he said during an earnings call.
Warren Buffett’s entering the mix just weeks ago as a sizable investor in both Sirius and the vehicle that holds Liberty’s Sirius shares also heightened merger expectations.
Buffett obviously saw value in Sirius — despite the fact that Liberty’s Sirius shares trade 23 percent below their net asset value, or NAV, wrote FBN analyst Robert Routh in an update.
If Liberty used those shares to buy Pandora, it might combine Sirius and Pandora into a single-asset- backed company and, by doing so, lose the NAV discount, Routh said.
Such wheeling and dealing may be too much for Maffei, who during Liberty’s earnings call said: “Pandora holders or whoever have hyped that we’re going to be here to bid … I wouldn’t hold my breath.”
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