Home Featured Warner Music Sets IPO Plan

Warner Music Sets IPO Plan

by admin2 admin2
28 views
warner-music-sets-ipo-plan

Access Industries Inc.’s Warner Music Group Corp. said it would proceed with plans to sell shares to the public despite market setbacks amid the coronavirus pandemic.

The initial public offering would value the third-largest music company—home to stars including Ed Sheeran, Lizzo, Cardi B, Madonna, Metallica and Neil Young—between $11.7 billion and $13.3 billion.

Though markets have floundered during the global health crisis, the listing signals the strength of the music industry, which has been resuscitated in recent years with the rise of music-streaming services such as Spotify and Apple Music.

The IPO market has been largely frozen during the coronavirus pandemic, but this month began to show signs of thawing. As the U.S. stock market has steadied, so has the appetite for some new listings.

Warner Music plans to float 70 million common shares—13.7% of its stock—on the

Nasdaq Stock Market

for $23 to $26 a share. Billionaire Len Blavatnik will retain voting control of the company.

The Ukraine-born business magnate bought Warner Music through Access Industries in 2011 for $3.3 billion. It was previously controlled by a trio of private-equity firms—Thomas H. Lee Partners, Bain Capital Partners and Providence Equity Partners—together with the company’s then-chief executive, Edgar Bronfman Jr., who bought the company in 2004 from what was then Time Warner Inc. for $2.6 billion.

Ed Sheeran in Moscow last July.



Photo:

Sergei Bobylev/Zuma Press

The value of music assets has since skyrocketed. The music industry, decimated starting in 2001 by online piracy and the collapse of CD sales, has been on a tear for four years, with revenue from subscriptions to streaming services such as those offered by

Spotify Technology SA

and

Apple Inc.

turning around the fortunes of record companies. Global recorded-music revenue grew 8.2% last year to $20.2 billion, according to the International Federation of the Phonographic Industry, with streaming accounting for more than half of the total for the first time.

In April, Warner Music reached a new global-licensing agreement with Spotify, ending a contentious yearslong negotiation between the streaming company and the label. Warner Music’s labels include Elektra Records, Atlantic Records and its flagship Warner Records. It also owns Warner Chappell Music, the third-largest music publisher.

Late last year,

Vivendi SA

sold a 10% stake in Universal Music Group to

Tencent Holdings Ltd.

for €3 billion ($3.36 billion), valuing the world’s largest music company at more than $33 billion. In February, the French media conglomerate teased a public offering of the subsidiary, saying negotiations to sell an additional minority stake were ongoing and that an IPO is planned for early 2023 at the latest.

Vivendi had rebuffed earlier offers for Universal, when the music company was valued at significantly less than it is today. Five years ago, Vivendi brushed off an activist investor’s call to sell some or all of Universal and use the funds to boost cash returns. In 2013, it rejected an $8.5 billion offer for Universal from Japan’s

SoftBank Corp.

Write to Anne Steele at Anne.Steele@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

You may also like

Leave a Comment