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Warner Music Sets IPO at 32.6M Shares

Washington – Underwriters for Warner Music Group Corp. on Monday set the terms of the record company’s pending initial public offering at 32.6 million shares with an estimated price range of $22 to $24 a share.

According to an amended prospectus filed Monday with the Securities and Exchange Commission, 5.43 million of the total shares are being offered by selling holders.

Warner Music Group acquired substantially all of Time Warner Inc.’s music division in March 2004 for $2.6 billion. The company is backed by a group of investors that includes the company’s chief executive, Edgar Bronfman Jr., as well as private equity firms Thomas H. Lee Partners, Bain Capital and Providence Equity Partners.

The company said it will use net proceeds from the IPO to redeem certain debt of its subsidiaries and for general corporate purposes. It won’t receive any of the proceeds from the shares sold by the selling holders, the filing said.

Goldman, Sachs & Co., Morgan Stanley, Lehman Brothers, Deutsche Bank Securities, Banc of America Securities LLC and Citigroup were listed as underwriters for the offering.

The underwriters also have the option to purchase up to an additional 4.89 million shares from the selling holders to cover overallotments, the filing said.

On March 11, Warner Music filed an IPO to sell up to $750 million in common stock but didn’t detail the terms of the offering.

For the three months ended Dec. 31, 2004, Warner Music reported net income of $36 million, the filing said.

Warner Music Group, based in New York, is home to acts like Madonna, Linkin Park and Kid Rock. It also holds rights to more than a million copyright-protected songs, including “Happy Birthday to You,” “When a Man Loves a Woman” and John Williams’ venerable “Star Wars” theme.

Warner Music Group said it intends to list its common stock on the New York Stock Exchange under the symbol WMG.

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