Pandora Facing Securities Suit Over Proposed Merger with Sirius XM
by Erin Shaak
Knapp v. Pandora Media, Inc. et al
Filed: November 15, 2018 ◆§ 3:18cv6927
A recent merger agreement between Pandora Media, Inc. and Sirius XM Holdings Inc. is the subject of a lawsuit filed by a stockholder who claims the music streaming giant failed to adequately disclose certain details of the potential transaction.
A recent merger agreement between Pandora Media, Inc. and Sirius XM Holdings Inc. is the subject of a proposed class action filed by a stockholder who claims the music streaming giant failed to adequately disclose certain details of the potential transaction to investors.
The case takes issue with an allegedly misleading proxy statement filed by Pandora, which the suit describes as “the world’s most powerful music discovery platform,” and its top executives. According to the complaint, the proxy neglected to disclose material details of the company’s financial projections, as well as “key inputs and assumptions” underlying the valuation analyses performed by Pandora’s financial advisors. With regard to the merger between Pandora and Sirius, the complaint argues that what’s being offered to Pandora stockholders is “unfair and inadequate” in that the essential value of Pandora’s stock is materially in excess of the worth of securities being offered, given the newly formed media behemoth’s prospects for future growth and earnings.
The plaintiff argues that he and other stockholders are entitled to the allegedly missing information because it could affect whether they vote in favor of the $3.5 billion deal at the upcoming stockholder meeting. From the complaint:
“It is therefore imperative that the material information that has been omitted from the Proxy is disclosed to the Company’s stockholders prior to the stockholder vote on the Proposed Transaction so that they can properly exercise their corporate suffrage rights.”
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