Pandora (P) rose sharply on Thursday after The Wall Street Journal reported that John Malone's Liberty Media (LMCA)  had floated the idea of a $15 per share offer to acquire the Internet radio service.

Shares of Oakland-based Pandora were gaining 4.8% to $12.94 in New York after surging as high as 10.4%.

Liberty Media CEO Greg Maffei pitched Pandora on a proposal to acquire the music streaming service in a deal that would have valued the company at more than $3.4 million, the Journal reported citing people familiar with the matter. The proposal was made "in recent months," according to the news site.

Pandora, which has attracted 80 million users since going public in 2011, has struggled over the past year to increase revenue after Apple(AAPL) - Get Report Music entered the music streaming market and privately-held Spotify continued to expanded its popular on-demand service.

Liberty Media would seem like a natural fit for Pandora given that it owns Sirius XM, the satellite-radio service that has built a profitable subscription-based business through partnerships with automakers. Pandora is also working with automakers to have its service installed in new vehicles, arguing that consumers are more likely to become long-term listeners to a free ad-supported service rather than one that costs $15 per month as with Sirius XM.

Talk of a potential deal with Liberty Media is certain to be warmly received by investors such as Keith Meister, a Carl Icahn protege, have repeatedly urged Pandora to hire an investment bank to explore selling the company. 

"We believe Pandora can become an even more differentiated product and a more valuable business as part of a larger enterprise," Meister said in a May 16 letter to Pandora's board of directors.

Sirius XM's advantage over Pandora is that it's considered to be a terrestrial radio service, and therefore pays less than 11% of revenue on music royalties whereas more than half of Pandora's sales have gone to musicians.    

Pandora is said to be building its own on-demand service by combining its Rdio acquisition with its Thumbprint Radio and Music Genome Project. Macquarie media analyst Amy Yong said the platform stands to be a "compelling product. The service will be priced competitively and at various points to attract a wider user base," Yong said in an July 18 investor report.

Pandora, which couldn't be immediately reached for comment about a possible Liberty Media bid, is scheduled to report its second-quarter earnings at the close of trading on Thursday.