Tencent Music Entertainment Group has hired Goldman Sachs Group Inc., Morgan Stanley and Bank of America Merrill Lynch for a public float that is expected to value the Chinese music streaming company at more than $30 billion, London's Financial Times reported, citing sources.
The Tencent Holdings Ltd. unit now reportedly targets to list on the New York bourse, instead of Hong Kong, whose stock exchange allows the issuance of dual-class shares only to founders and not to institutions.
JPMorgan Chase & Co. and Deutsche Bank AG, meanwhile, will play a supporting role in the IPO, which comes as Tencent Music is being spun out of its parent company, according to the FT.
Tencent Music reportedly plans to sell about 3% of its shares to strategic partners, including record labels such as Universal Music Group, Warner Music Group Corp. and Sony Corp. unit Sony Music Entertainment Inc., in order to maintain music streaming rights in a highly competitive market.
Reports about Tencent Music's IPO came after fellow music streaming provider Spotify AB, via its parent Spotify Technology SA, made its debut on the New York Stock Exchange in April. The company touched a $30 billion market cap during its first day of trading.
In December 2017, Tencent Music and Spotify agreed to swap minority equity stakes in exchange for cash. Tencent will also invest in Spotify through secondary purchases.
