Warner Music Group moves forward with IPO as streaming business hums

General News Warner Music Group Launches IPO – Variety

Warner Music, majority owned by billionaire Len Blavatnik's Access Industries Inc., is not selling any shares in the listing, with the offering made up entirely of existing shareholders selling stock, a rarity in IPOs. The company will list shares on the Nasdaq exchange under the ticker WMG.

Warner Music, the world's third-largest recording label and home to artists including Cardi B, Ed Sheeran and Bruno Mars, set a price target of US$23 to US$26 a share for 70 million Class A shares, the company said in a regulatory filing. It reported a profit of $256m in its most recent financial year, on revenue of $4.5bn.

However, recorded-music and music publishing thus far have been less affected economically by the pandemic than live-entertainment business, which has been flattened by the bans on large gatherings, leading Goldman to project a 75% revenue plunge for the live industry this year, to $7 billion. Labels operating within the company include Atlantic, Spinnin, Warner Records, Parlophone, and Elektra. He bought Warner Music for $1.3 billion in 2011, when the music industry was in the depths of a 15-year decline.

Warner Music's IPO ends any speculation that Access Industries was looking at selling the music company to Saudi-controlled Public Investment Fund for around $12.5 billion. That's boosted the value of music companies and enticed investors back to the record industry.

Sanofi shares down despite $13 billion Regeneron payday
That, in turn, raises the possibility that L'Oreal would buy back a 23% stake that Nestle SA holds in the French cosmetics maker. It is said that the offering and repurchase of shares will have no impact on the collaboration between the two companies.

The pandemic has led Goldman to decrease its projections considerably, with music pulling in $57.5 billion in 2020 - an nearly 30% drop from its authentic forecast, and depressingly decrease than 2019's $75 billion. Last week Warner Chappell Music entered into a global publishing agreement with British music icons Duran Duran.

Visit the Business Insider homepage for more stories.

Morgan Stanley, Credit Suisse, and Goldman Sachs are jointly managing the offering.

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