Sirius XM Formally Grabs A Piece Of Pandora


On Friday (9/22), as the Hart-Scott-Rodino antitrust waiting period expired, the additional closing of a big investment in Pandora by Sirius XM took place. This involved the $1 per share sale to Sirius XM of hundreds of thousands of Pandora shares. Pandora revealed the stock sale in an SEC filing made late Tuesday, which also confirmed the addition to Pandora’s board three key Sirius XM executives.

The additional closing involves the purchase by Sirius XM of 307,500 shares of Series A Preferred Stock, for $307.5 million.

This follows the 172,500 shares of Series A Preferred Stock issued and sold to Sirius XM on June 9.

SiriusXM may require Pandora to redeem the Series A preferred stock beginning on Sept. 22, 2022, the fifth anniversary of the closing, for an amount equal to its liquidation preference plus all accrued and unpaid dividends.

Pandora may also redeem the Series A preferred stock at any time after Sept. 22, 2020, the third anniversary of the closing, if the daily volume weighted average price of Pandora’s common stock is greater than or equal to 175% of the then applicable conversion price for a period of at least 20 days during a 30-day trading window prior to the notice of redemption.

With Friday’s second of two closings, Pandora moved ahead with the appointment — as required by Sirius XM’s investment agreement — of Gregory B. Maffei as a Class III director of the company.

Maffei as served as director and President/CEO of Liberty Media Corp. since May 2007. He will serve on Pandora’s board through the expiration of his term, at the company’s 2020 annual stockholders meeting.

Concurrently, David J. Frear and James E. Meyer are now Class II directors of Pandora’s board and will serve through the company’s 2019 annual meeting of stockholders.

Frear has served as Sirius XM Holdings’ Sr. EVP/CFO since June 2015. Meyer has served as Sirius XM Holdings’ CEO since December 2012 and has been a director of Sirius XM Holdings since January 2013.

Each of the Sirius Directors will be see annual cash compensation of $40,000 and an equity award valued at $200,000, which will vest on the earlier of June 1, 2018, the date of the company’s 2018 annual stockholder meeting, or upon certain changes in control of Sirius XM.

Maffei will also be entitled to $60,000 in additional annual compensation as Chairman of the Board, and $5,000 in additional annual compensation for his service on the board’s Nominating and Corporate Governance Committee.

Meyer will be entitled to an additional $7,500 annually for his service on the Compensation Committee.

With the additional closing on Friday, Elizabeth A. Nelson resigned from Pandora’s board. Nelson has served on Pandora’s board since 2013.  The Pandora Board now consists of nine directors.

Allen & Company LLC and BofA Merrill Lynch served as financial advisors to SiriusXM, and Jones Dayand Simpson Thacher & Bartlett LLP served as its legal counsel.

Centerview Partners LLC and Morgan Stanley & Co. LLC served as financial advisors to Pandora and Sidley Austin LLP and Wachtell, Lipton, Rosen & Katz served as its legal counsel.

In related news, Megan Liberman, formerly of Yahoo News, is joining Sirius XM as SVP/News, Talk & Entertainment. She reports to President/Chief Content Officer Scott Greenstein.

Prior to her time at Yahoo, Megan spent 13 years at The New York Times, most recently as Deputy News Editor.