Tencent Music Discloses Plan to Buy Back Up to $400 Million Worth of Shares

Tencent Music Entertainment
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Tencent Music Entertainment (TME) is displayed on the screen of an iPhone on June 12, 2018 in Paris, France. 

Tencent Music Entertainment’s board of directors has approved a buyback plan that could see the company repurchase up to $400 million of its shares. The program relates to Class A ordinary shares in the form of American depository shares — equity shares of a foreign-based company, traded on a U.S. exchange — during a 12-month period that began on Sunday, Dec. 15.

The company said the proposed repurchases would be made “from time to time” through the open market, in private negotiations, in block trades or through “other legally permissible means” by accessing it existing cash balance.

In its most recent earnings disclosure, TME said the combined balance of its cash, cash equivalents and term deposits was $2.96 billion. Total revenues for the quarter ended Sept. 30 was $910 million, with an operating profit of $166 million.

"The Share Repurchase Program reflects the Board's confidence in the fundamental and long-term potential of the Company's business,” said Cussion Pang, CEO of TME. “Our strong financial position and cash generating ability not only enable us to continue to invest in our long-term sustainable growth, but also return value to our shareholders."

Tencent Holdings, which owns a majority stake in TME, is reportedly in the midst of enlisting co-investors for its planned purchase of a 10% take in Vivendi’s Universal Music Group. Adding co-investors would allow Tencent to share both the costs and risks of the buyout, as well as ease scrutiny during the regulatory approval process.