Tencent Music Guides Pricing Around Midpoint in $1.2 Billion IPO

(Bloomberg) -- Tencent Music Entertainment Group, China’s largest music-streaming service, is guiding potential investors that it could price its $1.2 billion U.S. initial public offering around the midpoint of a marketed range.

The company sees price sensitivity in the middle of the range based on current orders, according to a message communicated to fund managers Tuesday. The final price hasn’t been set yet and the pricing level is subject to change.

Tencent Music will stop taking orders from Asian investors at the end of business Tuesday and at noon New York time for U.S. institutions, the message shows. The company and existing investors are marketing 82 million American depositary shares at $13 to $15 each.

Chinese companies have raised $8 billion from first-time share sales in the U.S. 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.

Tencent Music is slated to price its offering after the Dec. 11 market close, according to terms for the deal obtained by Bloomberg earlier. Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., Deutsche Bank AG and Bank of America Corp. are among underwriters of the offering. The company declined to comment.

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., which owns 59 percent, and music-streaming service Spotify Technology SA, with 8.9 percent, the filing shows.

--With assistance from Lulu Yilun Chen.

To contact the reporter on this story: Crystal Tse in Hong Kong at ctse44@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Timothy Sifert

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