Exhibit 99.1
Pandora Media, Inc. Announces $300 Million Convertible Notes Offering
OAKLAND, Calif., December 2, 2015 — Pandora Media, Inc. (“Pandora”) (NYSE: P) today announced its intention to offer, subject to market conditions and other factors, $300 million aggregate principal amount of convertible senior notes due in 2020 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”). Pandora also expects to grant Morgan Stanley & Co. LLC (“Morgan Stanley”), the initial purchaser of the notes, a 30-day option to purchase up to an additional $45 million aggregate principal amount of the notes. Morgan Stanley is acting as sole bookrunner for the offering.
The notes will be unsecured, senior obligations of Pandora, and interest will be payable semi-annually in arrears. The notes will be convertible into cash, shares of Pandora’s common stock, or a combination thereof, at Pandora’s election. The interest rate, conversion rate and other terms of the notes are to be determined upon pricing of the offering.
In connection with the pricing of the notes, Pandora expects to enter into one or more privately negotiated capped call transactions with one or more financial institutions (the “option counterparties”). The capped call transactions are expected generally to reduce the potential dilution to Pandora’s common stock upon any conversion of notes and/or offset the cash payments Pandora is required to make in excess of the principal amount of the converted notes in the event that the market price of Pandora’s common stock is greater than the strike price of the capped call transactions (which will initially correspond to the initial conversion price of the notes and is subject to certain adjustments under the terms of the capped call transactions), with such reduction and/or offset subject to a cap based on the cap price of the capped call transactions. If the initial purchaser exercises its option to purchase additional notes, Pandora intends to enter into one or more additional capped call transactions with the option counterparties.
Pandora expects that in connection with establishing their initial hedge of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of Pandora’s common stock and/or enter into various derivative transactions with respect to Pandora’s common stock concurrently with, or shortly after, the pricing of the notes. These activities could increase (or reduce the size of any decrease in) the market price of Pandora’s common stock or the notes at that time. In addition, Pandora expects that the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding derivative transactions with respect to Pandora’s common stock and/or by purchasing or selling shares of Pandora’s common stock or other securities of Pandora in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during any observation period relating to a conversion of the notes or in connection with any repurchase of notes by Pandora). This activity could also cause or avoid an increase or a decrease in the market price of Pandora’s common stock or the notes, which could affect the ability of noteholders to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of the notes, could affect the amount and value of the consideration that noteholders will receive upon conversion of the notes.