Shares of Pandora (P) were gaining by 4.8% to $8.82 at Friday's opening, after John Malone's Liberty Sirius XM Group (LSXMA - Get Report) controlled SiriusXM (SIRI - Get Report) announced that it is making a $480 million investment in the music streaming service.
"This strategic investment in Pandora represents a unique opportunity for SiriusXM to create value for its stockholders by investing in the leader in the ad-supported digital radio business, a space where SiriusXM does not play today," Sirius CEO Jim Meyer said.
As part of the agreement a subsidiary of SiriusXM will acquire an aggregate of $480 million in newly issued Series A convertible preferred stock of Pandora. SiriusXM bought $172.5 million of Series A preferred stock after the execution of the deal and has agreed to buy the remaining Series A stock after the deal closes.
"Pandora's large user base and its ability to provide listeners with a personalized music experience are tremendous assets. With its strong technology and new product offerings, we believe there are exciting opportunities for Pandora to accelerate its growth and increase value for Pandora and SiriusXM stockholders," the CEO added.
After coming to an agreement with Sirius, Pandora will terminate its investment agreement with KKR, paying the company a termination fee of $22.5 million.
Sirius XM's stocks were down 0.2% to $5.39 at Monday's opening.
Comcast (CMCSA - Get Report) , Netflix (NFLX - Get Report) and Alphabet (GOOGL - Get Report) are just some of the tech names in Jim Cramer's Action Alerts PLUS portfolio. Get his insights on the biggest names in tech here.