Warner Music Group good for IPO as Saudi wealth fund reportedly makes its bid
Warner Music Group has the green light to list its shares on the Nasdaq, the U.S. index that trades stock on many of the world’s technology giants, including Apple and Facebook.
In its filing to the SEC, Warner reveals its approved ticker symbol on the stock exchange will be ‘WMG’.
WMG was a publicly-listed company from 2005 until Ukrainian-born billionaire Len Blavatnik’s Access Industries bought it in 2011 for $3.3 billion, taking it back into private hands.
The music major’s new S1-A filing also notes that it would remain a “controlled company” after an IPO because WMG’s current 100% owner, Access Industries, would control a majority of the total combined voting power of the business’s outstanding common stock.
WMG, which is home to Atlantic Records, Warner Records, Elektra Records and Parlophone Records and the giant music publisher Warner Chappell Music, is also the subject of a published report that suggests a Saudi Arabia-controlled wealth fund has made an buyout offer, with a price tag of about around $12.5 billion.
“There’s one other bid in the mix, and it will come down to a number,” a source tells The Hollywood Reporter, which broke the story.
The touted price tag is only about a third of the value of Universal Music Group, the global market leader, which was recently valued at $33 billion after selling a 10% stake to a consortium led by Tencent, the Chinese tech giant.
Neither party has confirmed or denied the WMG-Saudi report, which comes soon after the oil rich nation’s sovereign wealth fund acquired a 5.7 percent stake in Live Nation, valued at US$500 million.
As TIO reported at the time, it would appear the sovereign state is assembling the pieces for a power move into live entertainment.
Meanwhile, THR suggests that the Saudi fund offered to buy a “small stake” in WMG for $750 million in February of this year.
The offer came to nothing as Blavatnik and Co. pushed on with plans for a flotation, which WMG put on ice because of market volatility created by the Coronavirus outbreak.
The health crisis certain had an impact on WMG’s activities in the early part of 2020.
Net income in the three months to March 31 declined by US$141 million and a revenue slipped to US$1.09 billion, down 1.7% compared with the same-period last year.
On the up side, recorded music streaming revenue grew by more than 9 percent to US$586 million, thanks to the rivers of revenue from streaming, new releases from Dua Lipa and the continuing success of Tones And I, among others.
“We had a tough comparison with an especially strong Q2 in 2019, so I’m pleased that we’ve matched our excellent performance in the prior-year quarter, due in large part to an 11% increase [in constant currency] in Recorded Music streaming revenue and a 17% increase in Music Publishing digital revenue,” WMG Chief Executive Steve Cooper said in a statement. “That’s a tremendous achievement, especially coming on the heels of Q1, when we achieved the highest quarterly revenue in our sixteen-year history as a standalone company.”
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This article originally appeared on The Industry Observer, which is now part of The Music Network.