Warner Music Group He set the price of his initial public offering at $ 25 a share, valuing the record label, which represents people like Ed Sheeran, Bruno Mars and Cardi B., at a staggering $ 12.75 billion.
Music giant led by CEO Lucian Grainge, who is the father of labels such as Atlantic Records, Warner Records and Elektra Records, said his shares will start trading on Nasdaq under the symbol “WMG” on Wednesday, launching one of the biggest IPOs of the year.
All of the shares being sold are being offered by billionaire holding companies Len Blavatnik Access Industries and AI Entertainment Holdings, which will receive all proceeds from the $ 1.925 billion share sale and none of the proceeds will go to Warner Music.
Blavatnik and other experts will still retain 433 million additional class B shares, of which investment banks that underwrite the share offering have a 30-day option to buy 11.55 million additional shares, the company said on Wednesday.
Earlier this week, The Wall Street Journal reported that Chinese tech giant Tencent was in talks to get a $ 200 million stake in the company before the IPO, making it an anchor investor. But, with two classes of shares, Warner Music will be classified as a controlled company, meaning that Class A shareholders will have little or no influence over how the company is managed.
Morgan Stanley, Credit Suisse and Goldman Sachs are the main underwriters of the offer, and the sale of shares is offered through a syndication of investment banks.
Warner Music is among a handful of companies that thrive during the coronavirus crisis as more consumers stream music than ever.
In a regulatory filing last week, the company said that in April, at the height of the pandemic, its streaming revenue actually grew 12 percent to $ 183 million, and its digital publishing revenue improved by $ 3 million to $ 22 million compared to April 2019.
Warner Music reported net income of $ 258 million in fiscal year 2019 on revenue of $ 4.48 billion, as recorded music generated $ 3.84 billion, or 86 percent of total revenue. The publishing arm, Warner Chappell Music, which has a catalog of more than 1.4 million copyrights, including those of composers Twenty One Pilots, Lizzo and Katy Perry, generated $ 643 million in revenue in the past year, or 14 percent of total income.
Blavatnik, a Ukrainian American who has an estimated net worth of $ 23.7 billion, according to the Bloomberg Billionaires Index, bought Warner Music for $ 3.3 billion in 2011 when the music industry was in the midst of a 15-year depression. .