American broadcasting company, Sirius XM Holdings Inc. (NASDAQ: SIRI), on Monday announced its intent to buy music streamer Pandora Media, Inc (NYSE: P) in an all-stock deal worth USD 3.5 Billion, making it the largest audio entertainment company in the world.
Under the deal, shareholders of Pandora will receive 1.44 per new share issued by SiriusXM for each Pandora share they hold. The implied pride of Pandora common stock is USD 10.14 per share, representing a premium of 13.8% over a 30-day volume-weighted average price.
The deal is expected to bring more than pro-forma revenue of USD 7 Billion for the combined Company. SiriusXM has more than 36 million subscribers in North America, while Pandora has more than 70 million monthly active users.
Pandora shares jumped over 8% in the premarket trading on Monday, but it gave up some of its gains and was trading 2.5% higher at USD 9.31 per share in Monday morning. While SiriusXM shares fell as much as 7.74% to USD 6.4 per share in New York.
Jim Meyer, Chief Executive Officer of SiriusXM, said, "We have long respected Pandora and their team for their popular consumer offering that has attracted a massive audience, and have been impressed by Pandora's strategic progress and stronger execution. We believe there are significant opportunities to create value for both companies' stockholders by combining our complementary businesses. The addition of Pandora diversifies SiriusXM's revenue streams with the U.S.'s largest ad-supported audio offering, broadens our technical capabilities, and represents an exciting next step in our efforts to expand our reach out of the car even further.”
SiriusXM maintained its full-year 2018 guidance provided on July 25th, 2018. It expects revenue of over USD 5.7 Billion and adjusted EBITDA of about USD 2.175 Billion.