Morgan Stanley Buys 2.34 Million Shares of Warner Music Group, Worth $105 Million

Warner Music Group WMG
Shirley Halperin

On a day that has been remarkably good for music companies on stock markets, Warner Music Group — which saw its stock climb thanks in part to Universal Music’s lofty IPO — on Tuesday announced the sale of an aggregate of 2,340,000 shares of the company’s common stock by affiliates of Access Industries to Morgan Stanley & Co. as the sole underwriter in the registered public offering of those shares. According to the announcement, the stockholders are selling all of the shares of Class A common stock, and Warner will not receive any proceeds from the offering (although Len Blavatnik’s Access, which acquired WMG in 2011 and took it public last year, will).

Full terms of the deal were not disclosed, but based on Warner’s closing share price of $45 on Tuesday, that would make the value of the stock around $105 million. A Warner spokesperson declined Variety‘s requests for comment.

The timing of the deal — which amounts to around .4% of Warner — is of course no coincidence: Warner has seen a healthy bump in the wake of the UMG IPO, enabling it to sell the shares at a profit, and Morgan Stanley’s acquisition will probably push Warner’s stock even higher.

Despite a rocky Monday for most U.S. stocks, with the S&P 500 falling by 1.7% for its worse trading day since May 12, news of UMG’s splash lifted Warner Music’s stock by almost 10% in today’s trading.

The announcement states that Morgan Stanley proposes to offer for sale the shares of common stock from time to time in one or more transactions on Nasdaq, in the over-the-counter market, through negotiated transactions or otherwise at a fixed price or prices, which may be changed, subject to receipt and acceptance by it and subject to its right to reject any order in whole or in part.

Warner’s registration statement, including a prospectus, relating to the offering was previously filed with the U.S. Securities and Exchange Commission and can be found on the SEC’s or Warner’s websites.