With Warner Music Group's announcement Thursday of plans to go public with an upcoming IPO, now begins a waiting game to see how much of the company will be sold and how the shares will be priced
With Warner Music Group's announcement Thursday of plans to go public with an upcoming IPO, now begins a waiting game to see how much of the company will be sold and how the shares will be priced, determining the company's overall valuation. That job will be left up to Morgan Stanley, Credit Suisse and Goldman Sachs, the stock offering's underwriters.
"After the completion of this offering, we will be a controlled company," the prospectus states. That means that Blavatnik will likely retain control of the company, even if his two entities sell 50% of the common shares, and Access will be the recipient of whatever proceeds the IPO brings in. In fact, as recently as last Friday, the day the company posted $122 million in net income on $1.256 million in revenue for its fiscal first quarter ended Dec. 31, 2019, WMG's chief financial Eric Levin implied that the company itself was in the process of re-calculating the company's valuation.
Until recently, recorded music had been trading at a 20 times EBITDA multiple and even that is up from 8 years ago when it was trading at 12 times EBITDA or back in the 1990's when they traded at a 4 times EBITDA multiple.
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