Pandora Eyeing Sale in Next 30 Days (Report)

pandora
Courtesy of pandora

Pandora is once again looking to sell itself — and this time, company executives believe they can seal a deal within weeks, according to a report from CNBC. This follows the news that private equity investment fund KKR had committed to investing $150 million in the company.

Pandora announced the KKR investment Monday as part of its quarterly earnings report, which showed continuing losses for the music streaming service. Revenue for Q1 of 2016 came in slightly below analyst expectations, totaling $316 million for the quarter, but losses were in line with what Wall Street had predicted, to the tune of $71 million.

Pandora saw its ad revenue slow down in Q1, but subscriber growth accelerated, thanks in part to the launch of its Premium service, which directly competes with Apple Music and Spotify. A total of 1.3 million users began a trial subscription in the past 7 weeks alone.

This prompted FBR Capital Markets analyst Barton Crockett to estimate in a research note that Pandora will end the year with a total of 8 million subscribers. Crockett previously had pegged Pandora’s year-end subscriber totals at 7 million.

But Pandora’s entry into the subscription business is proving costly for the company, which is why it announced the KKR investment Monday. As part of that deal, KKR is getting its hands on preferred stock of the company, as well as a seat on Pandora’s board of directors.

If Pandora was to sell itself within 30 days instead, it would have to pay KKR $15 million. “We have positioned the Company to evaluate any potential strategic alternatives, including a sale, in the 30 days before the financing is set to close,” said outgoing board member James M. P. Feuille Monday.

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