TENCENT Music Entertainment Group, the music distribution business of China’s social media giant Tencent Holdings Ltd., could be headed for an initial public offering later this year.

The Wall Street Journal reported yesterday that Tencent expects to meet investment banking advisors within the next month. It would aim to float the music division by the end of the year.

The share sale would raise fresh capital and value the business at more than US$25 billion. That was a sharp jump from its US$12.5 billion valuation in late 2017 when Swedish music streaming company Spotify bought a 9 percent stake in the firm as part of a share swap.

The report suggested that Tencent Music is most likely to be listed on a U.S. stock exchange, but said that the decision has not yet been finalized.

Many tech companies have taken advantage of U.S. securities rules that allow multiple share classes. That permits founders and management to hold on to corporate control, despite having sold off a majority of the equity.

Tencent, currently China’s largest Internet company, is listed in Hong Kong. Last year, it listed online publishing unit China Literature in Hong Kong, where its shares nearly doubled on its trading debut.

In a deal last year, Spotify took a 9 percent stake in Tencent Music and Tencent took a 7.5 percent stake in Spotify. That implied a US$12 billion valuation for Tencent Music. Tencent owed some 62 percent of Tencent Music at the end of 2017.

Tencent Music is by far China’s biggest music streaming service. It also has the advantage of being easily accessed on Android and Apple devices. (SD-Agencies)