China Tencent Music Halves US $ 2 Billion IPO: Sources

HONG KONG (Reuters) – Tencent Music Entertainment Group (0700.HKThe biggest music company in China has halved the amount it seeks to increase in a US list to about $ 2 billion, according to three people close to the market.

The subsidiary of Chinese technology giant Tencent Holdings (0700.HK) Two weeks ago, three people with knowledge in the field claimed to have been one of the largest companies listed in New York by a Chinese company this year.

Tencent Music had previously sought to raise up to $ 4 billion, said people familiar, which would have made it the biggest Chinese float in the United States in 2018, ahead of iQiyi streaming company (IQ.O) $ 2.42 billion IPO in March.

The company was seeking a valuation of about $ 25 billion, according to the Thomson Reuters IFR publication. The sources did not indicate whether the transaction, now less important, was linked to a lower valuation or a lower number of shares to sell.

Tencent refused to comment.

Tencent Music manages the music service providers QQ Music, KuGou and Kuwo, controlling three-quarters of China's growing music streaming market.

Users can listen to Chinese and international artists such as Justin Bieber, Ed Sheeran and Bruno Mars.

The filing was submitted to the SEC on September 7, according to two people close to the market.

The sources declined to be named because the information was not public.

The rapid growth of streaming music services in recent years has led to a recovery in the global recorded music sector, which has had its third year of positive growth in 2017, according to a report by IFPI.

Tencent Music's float follows that of the Swedish music streaming service Spotify (SPOT.N) earlier this year, online streaming becoming a larger share of the recording industry's revenues.

In December of last year, Tencent and Spotify entered into an exchange of shares, after which Tencent took a 7.5% stake in Spotify, including shares held by Tencent Music, according to the prospectus filed by Spotify in April.

Tencent Music will be the latest in a series of Chinese companies to have operated the US markets this year. Other groups that have organized SOPs include the NIO Inc electric vehicle start-up (NIO.N) – which raised $ 1 billion – and the Pinduoduo online discussion group (PDD.O), which raised $ 1.63 billion.