Warner Music Group’s IPO was supposed to start kicking off this week – but the company has delayed its flotation in the US due to market turbulence caused by fears surrounding the spread of the Coronavirus.
According to sources close to the company, WMG was set to share target price ranges for its public debut this week, as well as starting formal meetings with potential IPO investors today (March 2).
However, according to CNBC, Warner’s IPO plans have been put on ice while it waits out the negative effects on the stock market caused by Coronavirus panic.
Last week saw nearly 12% of value wiped off the S&P 500 Index – the collective indicator of the stock performance of 500 of the USA’s biggest public companies.
Global markets suffered their biggest fall in value since the 2008 financial crash as a result of the Coronavirus scare.
“Such volatility makes it difficult for IPO underwriters to find steady demand for a company’s shares,” reports CNBC in relation to Warner’s postponement.
CNBC further reports that New York-based Warner Music Group’s flotation is set to be one of the US’s larger IPOs this year, with sources suggesting the company will raise in excess of $1 billion.
Another music company seeking that kind of raise is K-Pop label Big Hit Entertainment. Last week it was reported that Big Hit, home to BTS, is planning to go public and has already chosen underwriters for the process.
Universal Music Group, meanwhile, is set to IPO in the next three years – though its parent, Vivendi, isn’t currently sharing much more in the way of detail.
Warner Music Group, led by CEO Steve Cooper (pictured), announced its intention to float on February 6.
The major’s related S-1 SEC filing revealed, amongst other things, that WMG’s current owner, Access Industries, will “control a majority of the total combined voting power of… outstanding common stock” following the IPO.
This, said the document, would leave Warner as a “controlled company” under corporate governance rules.
Warner’s IPO plans may yet accelerate again: at the time of publishing today (March 2), the S&P 500 had rebounded by 4.30% after last week’s falls.Music Business Worldwide