Music business

Music company NetEase Cloud Village launches $500 million Hong Kong IPO

The logo of internet technology company Netease is seen at the China Digital Entertainment Expo and Conference, also known as ChinaJoy, in Shanghai, China July 30, 2021. REUTERS/Aly Song

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HONG KONG, Nov 23 (Reuters) – NetEase Inc’s (9999.HK) music streaming business Cloud Village Inc is aiming to raise up to $500 million in an initial public offering in Hong Kong, documents show. regulations, having suspended the deal earlier this year following China’s regulatory crackdown on tech companies.

The company is selling 16 million shares, representing 7.7% of the expanded share capital, in the deal launched on Tuesday.

A price range of HK$190 to HK$220 has been set for institutional investors, according to a term sheet seen by Reuters, which will give Cloud Village a market capitalization of $5.4 billion to $6.2 billion. of dollars.

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An additional 2.4 million shares can be sold under a so-called green shoe option after the company is listed on the Hong Kong Stock Exchange.

Cloud Village will price its shares on Nov. 26 and begin trading on the Hong Kong Stock Exchange on Dec. 2, according to the term sheet.

NetEase has subscribed for $200 million in shares as lead investor alongside Song Music with $100 million and Orbis Investments with $50 million, according to the term sheet.

Cloud Village has scaled back the size of the IPO after initially aiming to raise at least $1 billion in August, sources told Reuters at the time.

But the deal was put on hold as global financial markets reacted to China’s series of orderly regulatory tightenings after Didi Global Inc went public in the United States.

Cloud Village is seen as the closest rival to Tencent’s (0700.HK) music streaming service, which dominates the mainland Chinese market.

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Reporting by Scott Murdoch in Hong Kong; Editing by Stephen Coates

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