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Pandora rejects Live Nation director takeover bid

Greg Maffei of Liberty Media, which owns 34% of Live Nation, offered $3.4bn for the struggling streaming service, which revealed today it lost $76.3m in Q2 2016

By Jon Chapple on 22 Jul 2016

Greg Maffei, Live Nation, Liberty Media, Pandora, Thomas Hawk

Liberty Media/Live Nation's Greg Maffei

image © Thomas Hawk

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.


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