Warner float off-key

NEW YORK - Warner Music Group's initial public offering raised a lower-than-expected US$554.2 million ($758 million) yesterday after its shares priced well below expectations.

The IPO was priced at US$17 a share, an underwriter said, which was below its estimated US$22-24 range.

Warner Music was expected to debut on the New York Stock Exchange overnight under the ticker symbol "WMG".

The offering comes roughly a year after media mogul Edgar Bronfman Jnr and a group of private equity partners acquired Warner Music for US$2.6 billion from Time Warner.

The float was timed to coincide with some positive news for the music industry.

After years of declines, US album sales edged up slightly last year from 2003, said Nielsen SoundScan.

But with an uncertain outlook for the record industry, which has been hurt by CD piracy, illegal online downloads and increased competition, some analysts said Warner Music had set its sights too high.

"Given the fundamental industry revenue outlook, peer group valuations, limited financial disclosure and bloated balance sheet, the estimated IPO range of US$22 to US$24 a share looks remarkably aggressive and underwhelming," Sanford C. Bernstein & Co analyst Michael Nathanson wrote in a research note before the deal.

- REUTERS