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WMG’s owners are looking to take advantage of a rebounding IPO market, which they expect to value their company at over $6 billion, the Post says.
REPORT: BRONFMAN & CO
READY FOR IPO
Registration for $750 Million-$1 Billion
Offering As Early As This Week; Offering
Within Two Months, Post Says
Warner Music Group’s owners are ready to take the company public, a New York Post report says.

Almost a year after Edgar Bronfman Jr. and a consortium of big equity players including Thomas H. Lee Partners, Bain Capital and Providence Equity Partners bought WMG from Time Warner for $2.6 billion, the owners are reportedly readying IPO registration documents that could be filed as early as this week.

If the SEC approves, the IPO could happen within one to two months, the paper says. The offering is expected to raise from $750 million to $1 billion.

Goldman Sachs and Morgan Stanley will reportedly lead the offering, with additional underwriting from Merrill Lynch, Lehman Brothers and Citigroup. The cash raised by the offer will be used to pay down debt, in addition to making the WMG principals richer than they already are.

Bronfman and his equity partners have already recouped their initial $1.25 billion investment, thanks to both a round of cash payouts and a $700 million high-yield bond offering last year. Given that they already have their money back, and IPO offers the principals big upside with little risk, the Post reports.

WMG has been rumored to be pushing to get an IPO done soon, before the troubles of the music business at large do any further damage to the company’s ability to post reasonable earnings. For the 10 months ended in September, the company managed to squeeze out 2% revenue growth. Meanwhile, the company’s goal of $250 million in annual savings is set to be met by May, achieved mostly through job cuts.

Some have questioned WMG’s IPO strategy, saying piracy problems which continue to plague the music business could put a cap on the company’s value in the stock market. But WMG’s owners are looking to take advantage of a rebounding IPO market, which they expect to value their company at over $6 billion, the Post says.

Once public, WMG is expected to use its shares to make acquisitions such as catalogs or to make another attempt to merge with EMI, the paper says.

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