Tencent Holdings is considering taking a stake in Warner Music Group ahead of the record company’s planned initial public offering (IPO) scheduled for later this week, people familiar with the matter told the Wall Street Journal (WSJ).
According to these sources, the Chinese conglomerate is in talks to invest as much as USD 200.00 million, which comes amid the global coronavirus pandemic.
There have been fewer IPOs than normal as many companies hold off or abandon plans to list due to the economic and market uncertainties caused by COVID-19.
Reuters also picked up on the potential investment, saying Warner Music is working to line up companies to contribute more than USD 1.00 billion of its USD 1.80 billion fundraising target.
The group is billed as the world’s third-largest record label with artists such as Cardi B, Ed Sheeran and Bruno Mars on its books.
Warner Music announced plans for its IPO in February 2020 and is looking to list in New York.
The company is expected to set the terms of the stock market flotation tomorrow and is likely to list a day later.
Morgan Stanley, Credit Suisse, Goldman Sachs, BofA Securities, Citigroup and JPMorgan, among others, will act as joint bookrunning managers for the listing.
Warner Music will not receive any proceeds from the sale of class A common stock being offered by existing shareholders.
During the six months ended 31st March 2020, the group posted revenue of USD 2.33 billion, up slightly from USD 2.29 billion in the corresponding period of 2019.
Net income during the same timeframe totalled USD 48.00 million, compared to income of USD 153.00 million in H1 2019.
Tencent is a multinational conglomerate with subsidiaries in various Internet-related services and products, entertainment, artificial intelligence and technology across China and around the world.
© Zephus Ltd