Leonard Blavatnik's Warner Music successfully pulls off the biggest IPO of the year in the US

Record company Warner Music Group (WMG) has successfully held the largest IPO in the United States since the beginning of the year for $1.9 billion, writes the Financial Times. Trading in the company's shares on Nasdaq opened on June 3, and on the first day its quotes jumped almost 20% to the IPO price.

The company increased the placement volume from 70 million to 77 million shares and sold them close to the upper limit - at $25 per share. The total capitalization of WMG at the placement price amounted to $12.75 billion.

The shares were placed by the companies of WMG owner, Soviet-born billionaire Leonard Blavatnik, mainly Access Industries. It is possible that part of the remaining stake will be used for further acquisitions, writes Reuters. WMG itself will receive nothing from the IPO.

What you need to know about the owner

In 2011, Blavatnik bought WMG for $3.3 billion at the height of the music industry's digital transformation uncertainty. Over the past years, WMG has learned to get 60% of its revenue "in digital", and the price of the asset has quadrupled.

Bloomberg believes that the deal and the valuation boosted Blavatnik's net worth by $6.6 billion to $30.3 billion, which means he should be in the top 30 of the agency's billionaire rankings (now in 41st place ).

Odessa-born Blavatnik made his fortune in oil and industrial assets along with Viktor Vekselberg and Mikhail Fridman (as The Bell wrote here , exactly ), but buying WMG is considered his most daring investment.

What you need to know about the company

Warner Music had a net income of $258 million in 2019 and revenue of $4.48 billion. The company has a strong set of artists, a reasonable genre policy and about 18% of the global market in sales, writes the FT.

Warner Music's business has suffered little from the pandemic, with more than a quarter of the company's revenue coming from contracts with streaming services Apple and Spotify. Spotify shares are up 25% this year.

WMG was going to hold an IPO on June 2, but postponed it for a day out of solidarity with the protests in the US and Blackout Tuesday.

The roadshow was held in a virtual format in a shortened time frame - four days. This made it possible to reduce the impact of market volatility.