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More than a year after Sirius XM made a "strategic" $480 million investment in Pandora after the music streaming service rebuffed the satellite radio company's deal proposal, it appears Pandora has finally caved.

Pandora

According to Bloomberg, SiriusXM announced early Monday that it had agreed to buy Pandora in an all-stock, tax-free deal valued at about $3.5 billion, with an implied price of Pandora stock of $10.14 per share, roughly a 12% premium over Friday’s closing price. The transaction is expected to close during the first quarter of 2019.

Notably, the deal includes a "go-shop" clause which gives Pandora a month to solicit a better offer.

SiriusXM fell over 3% in premarket trading on the news, while Pandora shares climbed 14%, before fading back...