Shares of Pandora (P) are on the rise after Corvex increased its stake in the company and sent a letter to its chairman Jim Feuille urging Pandora to explore a sale. SunTrust analyst Robert Peck was not surprised with the announcement but expects the company to publish an open response in support of its current business strategy. In February, rumors of a potential sale had emerged, but were largely pushed aside with the return of the music streaming service’s founder as the company’s CEO.

CORVEX PUSHING FOR SALE: Yesterday, Keith Meister’s Corvex Management announced that its stake in Pandora had increased to 8.3%, as it believes the shares are undervalued and are an attractive investment. Over the past several months, Corvex said it had discussions with the company about the music streaming service’s business and strategies. Furthermore, in a letter sent to Pandora chairman Jim Feuille, Coverx said: “We have become increasingly concerned that the company may be pursuing a costly and uncertain business plan. […] we urge the company to immediately engage an independent investment bank with a fresh perspective and without any prior history of advising the company to advise on a value maximization process – including the execution of a sales process – and to evaluate the results against other options including the risk-adjusted value of continuing to operate on a standalone basis.”

NOT A SURPRISE: The announcement that Corvex’s Meister had increased his stake in Pandora and called on it to explore a sale came with no surprise for SunTrust’s Peck. The analyst expects Pandora’s shares to rally off this news, and also expects the company to quickly publish an open response to the Corvex letter, likely voicing board support for the current strategy and leadership team. Peck continues to sees competitor Spotify, Liberty Media (LMCA), AT&T (T), Verizon (VZ), and, to a lesser extent, Amazon (AMZN), as “logical acquirers” of Pandora. SunTrust has a Neutral rating on Pandora’s shares.