Pandora Seeks Buyer and New Board Members

Timothy Leiweke - LA Lakers Game 2013 - Getty - H 2017
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Former Anschutz Entertainment Group CEO Timothy Leiweke will identify potential new directors for the digital music service.

Pandora raised $150 million and is seeking a buyer or strategic alternatives, the digital music service said Monday.

The investment comes from private equity firm KKR and Pandora said two members of its board are resigning, James Feuille and Peter Gotcher, while an independent committee chaired by former Anschutz Entertainment Group CEO Timothy Leiweke identifies new directors.

"At the upcoming 2017 annual meeting of stockholders, the board will recommend that its stockholders approve a resolution to declassify the board and provide for the annual election of directors in the future," Pandora said Monday.

Morgan Stanley and Centerview Partners are advising Pandora in its review of financial options.

"Having secured a significant financial commitment from KKR to strengthen the company's balance sheet, we have positioned the company to evaluate any potential strategic alternatives, including a sale, in the 30 days before the financing is set to close," said Feuille.

Pandora's revelation coincided with its quarterly results, which indicated that active listeners fell to 76.7 million compared with 79.4 million in the same quarter a year ago. The company ended the quarter with $203 million in cash, down from $243.3 million at the end of last year.

Shares of Pandora sunk 3 percent on Monday to $10.40, but rose 4 percent after the closing bell as word spread it was seriously seeking a buyer. The stock has sunk 71 percent since peaking a little more than three years ago.