Icahn Protégé's Corvex Discloses Giant Pandora Stake, Pushes a Sale

Corvex disclosed on Monday that it owns 9.9 % of Pandora Media, and urged the web music streaming firm to discover a sale.

Corvex is run by Keith Meister, a protégé of billionaire activist investor Carl Icahn, and stated within the letter to Pandora’s board that it had been assembly with the corporate’s administration in current months. It had withdrawn a plan to switch members of its board however stated it now believes Pandora ought to rent an funding financial institution to assist the corporate discover its strategic choices together with a sale.

Icahn Protégé's Corvex Discloses Large Pandora Stake, Pushes a Sale Icahn Protégé's Corvex Discloses Large Pandora Stake, Pushes a Sale

Keith Meister, founder and chief funding officer at Corvex Administration LP., speaks in the course of the Sohn Funding Convention in New York Might four, 2015. REUTERS/Brendan McDermid

"We now have turn out to be more and more involved that the corporate could also be pursuing a pricey and unsure marketing strategy…," Corvex stated. "It stays our agency perception that the corporate ought to instantly discover the potential worth to shareholders that might be realized in a sale transaction.

Corvex owns about 22.7 million shares within the firm, making it the most important shareholder.

Pandora didn’t instantly reply to a request for remark Monday relating to Corvex’s letter.

Oakland, California-based mostly Pandora has confronted robust competitors from music-streaming rivals resembling Spotify, Apple, Google and Amazon, and has failed to show an annual revenue as a public firm. Its shares are down greater than 25 % this yr.

Analysts have stated Pandora, which had a market capitalization of $2.29 billion on Monday, might be an acquisition goal for bigger media or Web corporations trying to beef up their on-line music choices.

Pandora co-founder Tim Westergren, a former musician who spearheaded Pandora’s music algorithm know-how, returned to the corporate March 28, squashing some buyers’ hopes the corporate might be bought.

Westergren advised Reuters on April 15, "If you wish to promote an organization, you do not do this by spending half a billion on acquisitions and hiring a brand new CEO."

In contrast to different streaming providers, which have negotiated offers with document labels to permit listeners to select songs, Pandora has acted extra like a radio station, delivering a stream of songs that match a style or artist however not permitting clients to make particular choices.

As on-demand providers catch on, Pandora is now enjoying catch-up and negotiating with document labels for the licenses it wants to supply such a service.