Tencent music arm makes its move on delayed IPO set to raise up to $1.23bn

Tech giant Tencent Holdings’ music subsidiary has moved forward on a New York Stock Exchange initial public offering (IPO) of up to $1.23bn (£1bn) today.

Tencent Music Entertainment is hoping to raise between $1.07bn and $1.23bn, according to a US Securities and Exchange Commission filing, in a delayed offering that was originally planned to launch in October.

The company delayed the IPO because of concerns over how the global stock market sell-off in recent months might hurt pricing. But as global stock markets jumped today from the slashing of US-China trade tariffs, Tencent filed to launch the IPO.

The music streaming company is selling 82m shares for between $13 and $15, with the option to sell an additional 12.3m shares through an over-allotment option, according to the filing.

A source close to the deal told Reuters Tencent Music wanted to float before tensions between the US and China got worse next year.

“It’s not worth waiting any longer for a potentially higher valuation if they have to deal with so many uncertainties,” said the source.

Tencent Music boasts more than 800 million monthly active users across its streaming apps QQ Music, Kugou and Kuwo as well as karaoke app WeSing.

The IPO would be the third-largest by a Chinese company on Wall Street this year, behind video streaming company iQiyi’s $2.4bn in March and online discounter Pinduoduo’s $1.6bn in July, but

But it is less than the $2bn that was suggest as a fundraising target in October, though this figure was not confirmed by Tencent.

The company will open its books on December 4 and shares will begin trading on 12 December, the source said.

It reported a 244 per cent jump in profit in the first nine months of this year to $394m from $114m in the same period in 2017.