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Tencent Music raises US$1 billion in US IPO

Tencent Music raises US$1 billion in US IPO

File photo of visitors at a booth of Tencent Music Entertainment at the Beijing Music and Life Show in Beijing, China, on May 7, 2017. (REUTERS/Stringer/File Photo)

NEW YORK: Tencent Music, the streaming division of Chinese technology giant Tencent, will raise around US$1 billion from the pricing of its US public share offering, the Wall Street Journal reported on Tuesday (Dec 11).

The newspaper, citing a source familiar with the deal, said the initial public offering (IPO) values Tencent Music at US$21.3 billion, making it one of the largest tech debuts on Wall Street.

That valuation is somewhat lower than some forecasts earlier this year that valued the music unit at US$25 billion or more.

Documents filed on Monday with the US Securities and Exchange Commission said the IPO would be offered in a range of US$13 to US$15 a share, and the Journal reported the offering prices was at the low end at US$13.

The filing said the company had achieved "growth and profitability at scale" with revenue of US$1.9 billion in the first nine months of the year and a profit of US$474 million.

Tencent's platforms across China include QQ Music, a start-up streaming service similar to Spotify that has the rights to stream songs from US-based Warner Music, among others.

The company said it planned to use the proceeds to "enhance our music content offerings to improve the variety, quality and quantity of content on our platform: and to help grow its base."

Parent firm Tencent is one of the largest tech firms in China with the WeChat social media platform and some one billion users.

Tencent also operates a variety of businesses including gaming and advertising and is seeking to invest more aggressively in online video, cloud services and artificial intelligence.

The IPO is one of several in the United States by big Chinese technology firms including Alibaba and Baidu.

Source: AFP/de

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