Tencent shares closed in the green Monday after the Chinese tech giant announced its plans to spin-off its music business and list it on the US stock market. Tencent Music will seek an IPO worth around $4 billion, meaning the business could be valued between $25-30 billion, reports say.
Tencent shares ended the Monday Asian trading session 2.43% higher at HKD396.00. The stock has been trading mainly lower over the past month, although there has been some sign of an upside more recently.
Tencent stock listing spin-off plans approved
In a press release, Tencent said that its plans to spin-off its music business and list it on the US stock exchange has been approved by the Hong Kong stock exchange. Further details on the proposed spin-off listing are still to be finalised, however.
“The terms of the Proposed Spin-off, including offering size, price range and assured entitlement of Tencent Music securities for shareholders of the Company, have not yet been finalized,” Tencent’s chairman of the board, Ma Huateng, said.
“Further announcement(s) will be made by the Company (Tencent) in relation to the Proposed Spin-off as and when appropriate,” he added.
Tencent Music on par with Spotify?
While Tencent Holdings didn’t give any financial details on the size of the proposed Tencent Music IPO, reports suggest the likely valuation could put it on par with Spotify, which only listed earlier this year.
The plans for the spin-off – which is seen as a blow to the Hong Kong stock exchange – could see Tencent Music have additional, fresh funds to purchase more content for its streaming users. That would be on top of the existing agreements it has in place with SONY music, Spotify, Universal Music Group and Warner Music Group.
The news of Tencent’s music spin-off plans also adds credibility to the view that the previously flagging music industry could now be turning things around as its finally gotten to grips with the tech and online influence on the industry.