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- George Soros' hedge fund owned a $56 million stake in Pandora at the end of the second quarter on June 30.
- Even at the highest prices of the quarter, Sirius XM's purchase of Pandora would represent at least a 30% premium on his investment, so long as he still holds the stock.
- Sirius XM would give Pandora shareholders 1.44 new shares for every Pandora share they own.
- A "go shop" provision allows Pandora to seek a better offer.
- Follow Pandora's stock price in real-time here.
Hedge fund billionaire George Soros disclosed a massive stake in Pandora last month, and his bet on streaming music appears to have already begun to pay off.
Soros Fund Management, which bought 7.12 million shares, worth $56.1 million, during the second quarter, will receive 1.44 newly issued Sirius XM shares for each Pandora share it owns, at an implied price of $10.14 per share, as part of the satellite-radio company's $3.5 billion, all-stock deal to buy its streaming competitor.
It's not clear at what price Soros' firm made its Pandora investment, but even at the highest price of the quarter — $7.64 per share — Monday's deal price represents at least a 32% premium, making his stake potentially worth $72.2 million in new shares.
The hedge fund also disclosed a $122 million stake in Pandora-competitor Spotify in its second-quarter filing, though it's possible that either investment could have been sold between the quarter's end on June 30 and today. The disclosures came as part of what's called a Form 13-F, in which asset managers must disclose their quarterly holdings four times per year. Entry and exit dates, as well as purchase prices, are not required as part of the regulatory document.
There's also a chance the deal could be nixed, either by government regulators who oversee mergers of this nature, or by a "go shop" provision included in the terms of the deal. Such a caveat allows Pandora's board to follow its fiduciary duty to shareholders by seeking competing offers.
"We believe there are significant opportunities to create value for both companies' stockholders by combining our complementary businesses,” Jim Meyer, Sirius XM’s CEO, said in a press release.
"The addition of Pandora diversifies Sirius XM's revenue streams with the U.S.'s largest ad-supported audio offering, broadens our technical capabilities, and represents an exciting next step in our efforts to expand our reach out of the car even further."
Following the news, Pandora shares surged more than 8% in early trading Monday, while Sirius XM sank about 3.7%.
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