For an industry that was on its knees not that long ago, these are heady times for Warner Music and Universal Music.
The world’s two biggest record labels have achieved a sweet harmony over the market value of music.
Warner Music Group Corp., the label behind David Bowie, Bruno Mars, Lizzo and Tom Petty, on Wednesday priced the shares for its initial public offering at $25 apiece. That valued the debt and equity of the world’s second-biggest record label at $15 billion, or about 24 times trailing Ebitda, a measure of earnings.
That’s almost exactly the same valuation multiple that Universal Music Group, its larger rival, was afforded when French parent Vivendi SA sold a 10% stake to a consortium led by Tencent Holdings Ltd. earlier this year. The alignment reinforces what looked like a pretty generous offer for the Universal stake at the time. And Warner’s shares did even better in the immediate aftermath of the IPO, rising by 15%. For an industry that seemed to be on its knees not that long ago — and not in a flattering “rock star on stage” way — these are heady times.
