Warner Music Group (WMG) has announced that it intends to price its IPO shares at $25 apiece, as part of what will accordingly be 2020’s single biggest stock-market debut.
Update: During its first day on the public market since 2011, Warner Music Group saw its per-share stock value grow significantly from the initially established $25 price point. Gains surpassed 20 percent ($5.12 per share), and the stock has continued to pick up steam amid after-hours trading, with its per-share worth nearing the $31 mark at the time of this writing.
In terms of total capital, the latter price has hiked the cumulative value of WMG’s 77 million shares from $1.92 billion to over $2.32 billion. Here’s our initial, pre-opening coverage from Wednesday (June 3rd) morning.
Warner Music Group officials revealed the IPO’s price in a formal release, which was emailed to Digital Music News (and the broader market) this morning. Heading into the offering, WMG upped its total IPO shares by 10 percent, from 70 million to 77 million. At the planned per-share price of $25, the offering’s value will just exceed $1.92 billion.
The Big Three record label, which boasts deals with artists including Ed Sheeran and Wiz Khalifa, is set to begin trading on the stock market later today, under the symbol WMG. The financial professionals who underwrote the IPO will be granted a 30-day window to purchase as many as 11.55 million WMG shares.
In early February, we were first to report on Warner’s return to the public market (Access Industries, a multinational conglomerate owned by billionaire Leonard Blavatnik, brought the then-struggling asset private in 2011).
Owing to the onset of the COVID-19 crisis, the IPO was shelved in March, only to be revived in May. However, it bears mentioning that rumors of Saudi Arabia’s making an offer to buy WMG circulated in the interim. The Middle Eastern nation has worked to bolster its tourism and entertainment industries as of late, and in April, it purchased a $500 million stake in leading concert promoter Live Nation.
As Saudi Arabia completed the Live Nation investment on the public market, via common stock, it’s certainly possible that it will do the same for WMG (assuming that the rumors of its interest in the label are true, of course).
Similarly, reports have emerged that Chinese conglomerate Tencent is looking to secure a $200 million stake in Warner Music Group. Back in March, Tencent closed a $3.3 billion deal with Vivendi-owned Universal Music Group (UMG), for which it received 10 percent ownership.