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Warner Music Group, the music label behind Cardi B., Ed Sheeran and Bruno Mars, moved forward with its planned initial public offering, saying Tuesday that it will raise as much as $1.8 billion for shareholders. Backed by billionaire Len Blavatnik, shareholders of the New York-based record group, which is home of Asylum, Atlantic Records, Parlophone, …
Warner Music Group, the music label behind Cardi B., Ed Sheeran and Bruno Mars, moved forward with its planned initial public offering, saying Tuesday that it will raise as much as $1.8 billion for shareholders.
Backed by billionaire Len Blavatnik, shareholders of the New York-based record group, which is home of Asylum, Atlantic Records, Parlophone, Elektra Warner Records and Warner Classics, plans to sell 70 million shares of its class A common stock priced between $23 and $26 a share, according to a regulatory filing Tuesday.
The offering consists entirely of secondary shares to be sold by Blavatnik’s Access Industries and other related selling stockholders, the filing said. Warner Music won’t retain any of the money raised.
Warner Music will have 510 million shares outstanding after the IPO, which would value it at $11.7 billion to $13.3 billion, or $12.5 billion at the midpoint of the price range.
In recent years, music sales have jumped thanks to the growth of paid streaming services like Spotify and Apple, which has, in turn, boosted the value of record companies and brought investors back into the fold.
Warner Music initially filed for the IPO in early February, then pressed pause on the plan in March, as markets tanked in the early stages of the coronavirus pandemic. Even though most industries have been squeezed by the effects of the virus crisis, streaming companies have benefited.
According to the filing, in April, at the height of the pandemic, the firm’s streaming revenue actually grew 12 percent to $183 million, and its publishing digital revenue improved by $3 million to $22 million compared to April 2019.
In fiscal 2019, Warner Music reported net income of $258 million in fiscal 2019 on revenue of $4.48 billion, as recorded music generated $3.84 billion, or 86 percent of total revenues. The publishing arm, Warner Chappell Music, which has a catalog of more than 1.4 million copyrights, including from songwriters Twenty One Pilots, Lizzo and Katy Perry, generated $643 million of revenue in the latest year, or 14 percent of total revenue.
Blavatnik, a Ukrainian-American, has a net worth estimated at $22.9 billion, according to the Bloomberg Billionaires Index, bought Warner Music for $1.3 billion in 2011. Prior to that, it was a publicly-listed company from 2005. Time Warner sold Warner Music in 2003 for about $2.6 billion to an investor group led by the Seagram heir Edgar Bronfman, Jr. and private equity firm, Thomas H. Lee.
According to Tuesday’s filing, Morgan Stanley, Credit Suisse Group AG, and Goldman Sachs Group Inc. are acting as joint bookrunners and as representatives of the underwriters for the offering.
The stock will trade on the Nasdaq market under the ticker symbol “WMG,” and the IPO will take place “as soon as practicable,” the filing said.
