Pandora lands a $480 million investment from Sirius XM, and unloads Ticketfly for $200 million

Sirius XM will invest $480 million in internet-radio pioneer Pandora, the companies said in a joint statement Friday.

Pandora will also sell Ticketfly, the ticketing startup it bought for $450 million in 2015, to Eventbrite for $200 million.

Under the terms of the Sirius XM investment, a subsidiary of the satellite-radio powerhouse will buy issued series A convertible preferred stock of Pandora, representing 19 percent of the company's current outstanding shares.

The deal comes after private equity firm KKR & Co LP agreed last month to invest $150 million in Pandora.

KKR's agreement gave Pandora a 30-day-period to look for an alternative deal. This period was set to expire on Thursday, and so Sirius XM was racing late on Wednesday to beat that deadline and clinch its own investment in Pandora, sources told Reuters. But on Thursday, Pandora announced that it had extended the deadline "to explore interest expressed by a strategic investor in making a substantial minority investment in Pandora, in lieu of the KKR investment."

We now know that investor was Sirius XM.

To sell or not to sell

Pandora has endured on-an-off M&A chatter for months, as it tries to re-invent its business with the launch of an on-demand competitor to Spotify and Apple Music. That product finished its rollout in April.

Liberty Media, which controls satellite-radio Sirius XM, has been seen as the only real buyer in town.

That means Pandora has had to endure stock swings whenever Liberty Media CEO Greg Maffei talks publicly about the company - which is often. Maffei reportedly made an informal offer for Pandora at roughly $15 a share early last year. But in March, Maffei said that Pandora was "overvalued," and that $10 per share was something that could work. Right now, it seems that Liberty/Sirius XM isn't ready to take the plunge.

Still, any partnership between Sirius XM and Pandora would be a boon to both companies, given that they target a common audience. Pandora is seeking to become more popular with drivers, many of whom subscribe to Sirius XM, while Sirius XM is looking to expand its internet and mobile presence.

Pandora had been urged to explore a sale by Corvex Management LP, an activist hedge fund run by Keith Meister, a protégé of activist investor Carl Icahn. Corvex owned 8.6% of Pandora as of the end of March.

(Reuters reporting by Aishwarya Venugopal, Liana B. Baker, Greg Roumeliotis, and Julia Love)