Pandora rejects Live Nation director takeover bid

The board of music streaming service Pandora has reportedly turned down a US$3.4 billion offer to be acquired by Liberty Media, which owns a 34% stake in Live Nation Entertainment and whose CEO and president, Greg Maffei, sits on Live Nation’s board of directors.

Maffei’s offer works out at around $15 a share, but Pandora directors feel the company is worth closer to $20, according to a report in The Wall Street Journal.

The company’s latest financial results, released today, reveal that it continues to bleed money, with a net loss of $76.3 million in the second quarter of 2016. More an internet radio platform than a true streaming service, Pandora has struggled to play catch-up with on-demand streaming services such as Spotify and Apple Music, although it is rumoured to be launching its own on-demand music streaming feature in the near future.

In addition to its stake in Live Nation, Liberty Media owns satellite-radio operator Sirius XM and part of the Pepsi Center in Denver (20,000-cap.) and the Atlanta Braves baseball team and its stadium, Turner Field (49,586-cap.).

“Live Nation, Pandora and Sirius could act as a powerful end-to-end music distribution platform from live music to streaming music and radio”

Last month BTIG analyst Brandon Ross said Pandora could be the lynchpin in an eventual Sirius XM/Live Nation merger. “While Sirius and Live Nation together might not create great synergy, we believe that Sirius and Pandora together create a little more and that Live Nation and Pandora create a lot more than that,” he commented.

“All together, the three companies could act as a powerful end-to-end music distribution platform from live music to streaming music and radio. Such a company would also have significant control over artists and labels and be able to act as an extended flywheel with many ways to monetise. Sirius’s consistent FCF [free cash flow] could also be used to make this platform global. If the combined company wanted to launch on-demand streaming, it could do so.”

Maffei was reelected to the Live Nation board with an increased majority in June.

Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.