Warner Music shareholders raise US$1.9b in upsized IPO

Marco Green
June 3, 2020

The first big-name flotations since the coronavirus pandemic hit the world's financial markets are due in NY later this week as Warner Music and the data firm ZoomInfo Technologies, with a combined value of $20bn (nearly £16bn), get set to list their shares.

Warner Music Group on Wednesday began selling its stock at $25 a share, marking the largest initial public offering in the USA this year.

Warner Music and its shareholders delayed the IPO pricing by one day to avoid selling shares on "Blackout Tuesday", which saw entertainers and celebrities call for online musical performances and related events to be cancelled to show support for the protests across the U.S. against police brutality, people with knowledge of the matter said.

All of the shares being sold are being offered by billionaire Len Blavatnik's holding companies Access Industries and AI Entertainment Holdings, which will receive all the revenue from the $1.925 billion stock sale with none of the proceeds going to Warner Music. But, with two classes of shares, Warner Music, will be classified as a controlled company, meaning that Class A shareholders will have little to no influence on how the company is run. The others include business intelligence firm ZoomInfo Technologies Inc. with a listing of up to $890 million, as well as IPOs by Chinese e-commerce firm Dada Nexus Ltd., Shift4 Payments Inc. and cancer treatment developer Legend Biotech Corp.

A representative for Warner Music declined to comment. The delay was reported earlier by the Wall Street Journal.

The New York-based company, which represents artists such as Ed Sheeran and Cardi B, increased the number of shares in its offering to 77 million shares, 7 million more than previously announced. Its roadshow presentation included screen shots of quarantine concerts streamed on Instagram Live, as well as popular clips on TikTok.

Morgan Stanley, Credit Suisse and Goldman Sachs are the lead underwriters for the offering, with the sale of shares being offered through a syndication of investment banks.

Steve Cooper, CEO, Warner Music Group said, "This fund will support the extraordinary, dedicated organizations that are on the front lines of the fight against racism and injustice, and that help those in need across the music industry".

Shares trading under the symbol "WMG" rose 18% to $29.46 on Nasdaq on Wednesday afternoon.

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Other reports by Click Lancashire

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