Tencent Music Entertainment is launching a share repurchase program and may buy back up to $400 million worth of its shares.
According to a statement issued by TME today (December 17), the company’s board of directors authorized a share repurchase program under which it may repurchase its Class A ordinary shares, in the form of American depository shares, during a twelve-month period commencing on December 15, 2019.
The company’s potential $400m buyback comes a year after Spotify indicated its intention to buy back $1bn worth of its stock.
The share buyback plan also comes a month after the announcement of TME’s Q3 results.
TME, owner of QQ Music, Kugou and Kuwo, reached a total of 35.4m paying music subscribers in the three months to end of September, while the firm’s online music services – including both streaming and downloads – generated RMB 1.85bn (US $258m) in the quarter.
“The Company’s proposed repurchases may be made from time to time through open market transactions at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on the market conditions and in accordance with applicable rules and regulations,” said TME in the statement issued today.
“All Class A ordinary shares of the Company represented by the ADSs repurchased under the Share Repurchase Program are expected to be canceled. The timing and dollar amount of repurchase transactions will be subject to the Securities and Exchange Commission Rule 10b-18 and Rule 10b5-1 requirements.
“The Board will review the Share Repurchase Program periodically, and may authorize adjustment of its terms and size or suspend or discontinue the program. The Company plans to fund repurchases from its existing cash balance.”
“Our strong financial position and cash generating ability not only enable us to continue to invest in our long-term sustainable growth, but also return value to our shareholders.”
Mr. Cussion Pang, Tencent Music (Pictured main)
Mr. Cussion Pang, Chief Executive Officer of Tencent Music, said: “The Share Repurchase Program reflects the Board’s confidence in the fundamental and long-term potential of the Company’s business.
“Our strong financial position and cash generating ability not only enable us to continue to invest in our long-term sustainable growth, but also return value to our shareholders.”Music Business Worldwide