Tencent Could Be Making a Huge Investment into Warner Music Group

China’s internet giant Tencent Holdings is in discussions to invest $200 million into Warner Music Group. The record company’s initial public offering is expected next week says the Wall Street Journal.

The IPO could be potentially the largest New York IPO this year and was delayed due to the coronavius pandemic.

According to the WSJ report, Warner Music, who has musicians like Ed Sheeran under them, is also working to line up institutions that, along with Tencent, would serve as anchor investors contributing a total of more than $1 billion toward a fundraising goal of as much as $1.8 billion. The report cited people familiar with the matter.

Warner Music is expected to price its IPO on June 2 with the stock then debuting on Nasdaq the following day under the symbol “WMG”.

Warner’s recorded-music business generated $3.84 billion last year, according to the company’s prospectus, making up 86 percent of the company’s revenue.

According to filings, the company expects to fetch between $23 and $26 per share and will put up 70 million shares on Nasdaq, which could raise more than $1.8 billion for shareholders. That’s 13.7 percent of its common stock, valuing the company at as high as $13.3 billion.

It was in March that as leader of a consortium of buyers, Tencent completed the acquisition of 10% in Universal Music Group for a purchase price of $3.4 billion.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.