Pandora Media said on Monday that KKR & Co has agreed to invest $150 million in the music streaming service, while the company explores strategic alternatives, including a sale.
The company's shares (p) were up 3.4% at $10.75 in extended trading.
Pandora said Richard Sarnoff, KKR's head of media & communications private equity investing in the Americas, will join its board.
"... 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," board member James Feuille said in a statement.
Pandora has been urged to explore a sale by hedge fund Corvex Management, run by activist investor Keith Meister, after it disclosed a 9.9% stake in Pandora in May last year.
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Pandora also said that Feuille and Peter Gotcher will resign from the board, which is forming an independent committee to identify and appoint new directors.
KKR will purchase $150 million in a new designated Series A convertible preferred stock of Pandora. The offering, which is not expected to close earlier than June 8, may be upsized to a total of $250 million.
Pandora faces stiff competition from services such as Sweden's Spotify, Apple's Apple Music, Google's Play Music and Amazon.com Inc's Amazon Music Unlimited, which dominate the on-demand music service market.
Centerview Partners and Morgan Stanley will continue to advise the board regarding its review of strategic alternatives, Pandora said.