Warner Music Group Corp. announced today that it has launched the initial public offering of 70,000,000 shares of its Class A common stock, pursuant to a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission. The initial public offering price is expected to be between $23.00 and $26.00 per share. The offering consists entirely of secondary shares to be sold by Access and certain related selling stockholders.

The company, which is owned entirely by Len Blavatnik’s Access Industries, first announced its intention to launch an IPO in February, but shortly afterward, on March 2, delayed it when the coronavirus pandemic took effect in the U.S. and Europe.

The underwriters will have a 30-day option to purchase up to an additional 10,500,000 shares of Class A common stock from the selling stockholders.  The Company will not receive any proceeds from the offering.  The Company has been approved to list its shares of Class A common stock on The Nasdaq Stock Market LLC under the ticker symbol “WMG.”

The resumption of the IPO is in many ways not surprising. While Universal Music Group was recently valued at a whopping $33 billion — as part of its agreement to sell 10% of itself to a consortium led by Chinese tech giant Tencent — a Goldman Sachs report released earlier this month projects a 25% drop in global music revenue in 2020 due to the pandemic.

However, recorded-music and music publishing thus far have been less affected economically by the pandemic than live-entertainment business, which has been flattened by the bans on large gatherings, leading Goldman to project a 75% revenue plunge for the live industry this year, to $7 billion.

Yet the pandemic took hold in the U.S. and Europe toward the end of the last financial quarter, when the impact was only beginning to be felt by most companies. The thinking behind Warner’s move is likely that the company is looking to launch the IPO before the market feels the full effect of the pandemic.

Adding to that logic is the fact that unlike the other major labels, Warner had a rough first quarter of 2020: Although streaming revenues were up 11% to $586 million and digital revenue was up 5.7% , total revenue was down 1.7% compared to the prior year-quarter or flat in constant currency, net loss was $74 million versus net income of $67 million in the prior-year quarter. Recorded music revenues were down 2.8% year over year (1.5% at constant currency) to $907 million, and physical music sales were hit hard, dropping 27.7% ($36 million) to $94 million.

The pandemic has led Goldman to lower its projections significantly, with music pulling in $57.5 billion in 2020 — a nearly 30% drop from its original forecast, and depressingly lower than 2019’s $75 billion. It also scaled down its publishing forecast by 5% (to $6 billion) and recorded music by 8% (to nearly $21 billion). In its report, Goldman said it expects a “strong rebound” in the live sector in 2021 and an average 6% growth in the music business over the next decade, nearly doubling in value to $142 billion by 2030.

Tuesday’s announcement essentially puts the kibosh on an report from early this month that Saudi Arabia’s Public Investment Fund, which recently acquired a $500 million stake in Live Nation, the world’s largest live-entertainment company, was also kicking the tires on Warner.

Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. LLC are acting as joint bookrunning managers and as representatives of the underwriters for the offering.  BofA Securities, Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are also acting as joint bookrunning managers.  Barclays Capital Inc., Evercore Group L.L.C., Guggenheim Securities, LLC, Macquarie Capital (USA) Inc., Nomura Securities International, Inc., RBC Capital Markets, LLC, SunTrust Robinson Humphrey, Inc., CIBC World Markets Corp., HSBC Securities (USA) Inc., SG Americas Securities, LLC; Société Générale, LionTree Advisors LLC, Raine Securities LLC, AmeriVet Securities, Inc. Bancroft Capital, LLC, Blaylock Van, LLC, C.L. King & Associates, Inc., Loop Capital Markets LLC, Roberts & Ryan Investments, Inc., Samuel A. Ramirez & Company, Inc., Siebert Williams Shank & Co., L.L.C., Telsey Advisory Group LLC and Tigress Financial Partners, LLC are acting as co-managers for the offering.

A registration statement relating to the proposed initial public offering has been filed with the SEC but has not yet become effective.  These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.  This press release does not constitute an offer to sell or the solicitation of an offer to buy securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.

https://variety.com/2020/music/news/warner-music-group-launches-ipo-1234615985/