Tencent Music IPO Raises $1.1 Billion After Low-End Pricing

(Bloomberg) -- Tencent Music Entertainment Group, China’s largest music-streaming service, and existing investors raised about $1.1 billion after pricing a U.S. initial public offering at the bottom of a marketed range.

The company, which is backed by billionaire Pony Ma, and current holders sold 82 million American depositary shares at $13 apiece, according to a statement. The shares were offered at $13 to $15 each. Tencent Music opted to price lower after initially guiding fund managers that orders were coming in around the midpoint of the marketed range.

Tencent Music’s final pricing implies a valuation of about $21.3 billion for the company. That’s less than the $23.3 billion market capitalization of Spotify Technology SA, the Swedish streaming giant that’s also an investor in Tencent Music.

The deal adds to the $8 billion raised in U.S. first-time share sales by Chinese companies this year, more than double the same period in 2017, data compiled by Bloomberg show. It’s the biggest year for mainland firms since 2014, when Alibaba Group Holding Ltd. priced the world’s largest IPO, the data show.

Net income at Tencent Music more than tripled in the first nine months of the year to $394 million, according to an exchange filing. Revenue for the period nearly doubled to about $2 billion. Its major shareholders include Tencent Holdings Ltd., China’s largest social networking company, which owned 59 percent, before the offering. Spotify held 8.9 percent, the filing shows.

Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., Deutsche Bank AG and Bank of America Corp. are among underwriters of the offering.

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