Warner Music Group has restarted plans for an initial public offering.
In an amended registration filing, the music giant said it will offer 70 million shares of Class A common stock at a target price of $23 to $26 per share, raising as much as $1.8 billion for shareholders. The company would be valued at $12.5 billion at the midpoint of its price range.
The shares are being sold by Access Industries and some other shareholders, and Warner Music would not receive any proceeds from the sale, the company said.
Warner Music first filed for the public offering in February.
The company said parts of its business have actually improved during the economic shutdown precipitated by the COVID-19 pandemic.
Streaming revenue was $183 million in April, up 12% year-over-year. Warner also reported publishing digital revenue was $22 million in April, up $3 million compared to the same period last year. Overall revenue was down year-over-year for the month.
In its filing, the company said its recorded music business generated $3.84 billion in revenue in 2019, 86% of the total revenue for the company. Its music publishing business generated $643 million.
Warner reported nearly $3 billion in consolidated debt and said its leverage could hurt its ability to raise new capital to fund operations. “We are highly leveraged,” the company said in its filing. The recorded music business includes artists Ed Sheeran, Bruno Mars, and Cardi B, while the music publishing business includes Lizzo and Katy Perry.
Warner said, after completion of the offering, it would be a “controlled company” under Nasdaq’s corporate governance standards. Access Industries and some of its affiliates would represent more than 99% of the total combined voting power of the outstanding common stock. The underwriters have an option to buy 10.5 million shares.
The stock will trade on the Nasdaq market under ticker symbol “WMG.”