Warner Music launches IPO valuing group at up to $13.3bn

Warner Music has relaunched its shelved initial public offering in a test of the market's confidence after the Covid-19 crisis caused share prices to plunge.

The music company, whose artists include Ed Sheeran and Madonna, plans to sell 70m class A shares with a target price of $23-$26 a share to raise up to $1.8bn (£1.5bn).

The transaction would value the company at between $11.7bn and $13.3bn. Russian billionaire Len Blavatnik paid $3.3bn for the distributor of Led Zeppelin and Aretha Franklin's back catalogue in 2011. The company's labels include Atlantic, Warner Records, Asylum and Parlophone excluding The Beatles.

Warner originally filed for an IPO in February but put the sale on hold as the spread of the Covid-19 pandemic caused stock markets to plunge. After stock markets stabilised in the past few weeks the company has decided to go ahead. Warner will not retain any of the cash raised from the IPO and Blavatnik's Access Industries will still have most of the voting power of the company's common stock.

Music companies have fared relatively well during the Covid-19 crisis and have had a resurgence with the rise of streaming through platforms such as Spotify. Since the financial crisis the music industry has compressed into three big companies – Warner, Universal and Sony.