Warner Music Delays IPO Pricing for Blackout Tuesday

(Bloomberg) -- Warner Music Group Inc. delayed the pricing of its initial public offering until Wednesday to avoid the shares being sold on a day the music industry set aside to support protests against police brutality in the U.S., according to people familiar with the matter.

Entertainers and celebrities called for online musical performances and related events to be canceled on “Blackout Tuesday” to show support for the protests, which began after George Floyd, an unarmed black man, died May 25 after a white Minneapolis police officer knelt on his neck.

Warner Music plans to have shares being sold by existing investors priced Wednesday morning and begin trading later that day, said the people, who asked not to be identified because the information wasn't public yet.

The company isn't planning to issue new shares in the IPO. Instead, two entities controlled by billionaire Len Blavatnik are selling most of the 70 million shares being offered at $23 to $26 each. AI Entertainment Holdings LLC, which is selling about 46 million of its shares, will retain about 90% of the shareholder voting power after the offering, according to filings with the U.S. Securities and Exchange Commission. Access Industries LLC is selling 20 million of its shares in the IPO, the filings show.

For More: IPOs Revive With Warner Music Kicking Off $6.4 Billion Week

The share sale could raise as much as $1.8 billion, valuing the company at more than $13 billion based on the outstanding shares listed in its filings.

The listing signals the renewed strength of IPOs after a hiatus amid the market volatility brought on by the pandemic. While offerings by so-called blank check companies, along with corporate stake sales and private placements, have filled the gap in the U.S., IPOs rebounded in May with a $510 million offering by Kingsoft Cloud Holdings Ltd. and Selectquote Inc.'s $655.5 million raise, including so-called greenshoe shares.

NetEase, ZoomInfo

Globally, listings Warner Music, NetEase Inc., which is planning a $2.8 billion offering in Hong Kong, and other companies are set to raise a total of more than $6.4 billion this week, according to data compiled by Bloomberg. 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.

Warner Music's catalog covers a sprawling range of artists, from Lizzo, Dua Lipa and Ed Sheeran to Coldplay, Prince and Neil Young.

With homebound listeners looking for entertainment, the New York-based company's emphasis on streaming revenue has resonated with investors. Its roadshow presentation included screen shots of quarantine concerts streamed on Instagram Live, as well as popular clips on TikTok. Music streaming platforms figure prominently in Warner's sales, with Spotify and Apple accounting for 27% of its $4.5 billion in revenue for the fiscal year ended in September, filings show.

The offering is being led by Morgan Stanley, Credit Suisse Group AG, Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. The shares are expected to trade on the Nasdaq Global Select Market under the symbol WMG.