HITS Daily Double
It was apparent that Chairman/CEO Edgar Bronfman Jr. and his investment partners were eager to file for the IPO, but the speed with which the filing was made is still surprising; earlier this week, we said that it could happen as soon as within 60 days.


Bronfman, Thomas Lee and Posse Waste No Time Filing With the SEC
Whoa, that was quick. Warner Music Group filed for an initial public offering with the SEC Friday morning.

It was apparent that Chairman/CEO Edgar Bronfman Jr. and his investment partners were eager to get the IPO rolling; on Monday, The N.Y. Post Post said WMG would likely file registration forms this week, and that the IPO itself (i.e., the actual sale of stock) could happen within 60 days. The Post was right.

WMG, which hopes to raise $750 million from the IPO, didn’t reveal any details in the filing, so it remains to be seen how many shares will be sold or the estimated price per share. Neither was it made clear wherther the stock will trade on the NYSE or Nasdaq, or what the stock symbol would be.

Bronfman, Thomas Lee and co. have been spinning Wall Street in anticipation of the offering, pointing to a 2% gain in revenue for the 10 months through Sept. 30, as well as $250 million in overhead cuts made ahead of schedule. WMG posted a profit of $36 million, compared to a loss of $1.15 billion a year earlier, more than $1b of which was due to impairment charges. But revenue for the company’s fiscal first quarter, which ended Dec. 31 and included the critical holiday run, was down 7.9% from the same period a year earlier to $1.09 billion, from $1.18 billion, according to documents submitted to the SEC, even as WMG’s marketshare continues to shrink.

You might expect a major windfall for WMG’s principals, but as we reported earlier this week, sources say that all WMG employees, including Bronfman and Lyor Cohen, will have to hold their shares for up to four years before cashing out. Said principals declined to comment to Reuters about the IPO, citing the required quiet period.

WMG said in the filing that it plans to use proceeds from the offering to repay debt and for general corporate purposes.

As expected, Goldman Sachs and Morgan Stanley will be the lead underwriters for the IPO, with Lehman Brothers, Merrill Lynch, Deutsche Bank, Bank of America and Citigroup also ponying up, according to the filing.