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Monday, September 24, 2012

Pandora Could Be Poised For Takeover


Bloomberg is reporting Apple’s potential entry into Internet radio is poised to put online music pioneer Pandora Media on the takeover wish lists of companies from Google and Amazon.com to Clear Channel Communications.

Pandora is projected to increase revenue by 214 percent in the next two years, almost triple the median for U.S. Internet media companies valued at more than $1 billion, according to data compiled by Bloomberg. With the shares down 34 percent since their initial public offering, a buyer could acquire a company trading for 21 percent less than the industry’s average price-to-sales ratio using next year’s forecasts, the data show.

Pandora sank 17 percent on Sept. 7 amid speculation iPhone maker Apple will introduce a rival service. Should Apple do so, that may compel Google or Amazon to snap up Pandora’s 150 million registered users to offer the service on mobile devices, Albert Fried & Co. and Needham & Co. said. Radio-station owner Clear Channel may be interested as listeners and advertisers shift to online media, according to Wedge Partners Corp. Needham says Pandora could fetch $14 a share in a takeover, a 32 percent premium, while Albert Fried sees the potential for a deal at about $20.

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