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Crunch time for Tencent Music’s 2018 $2 billion IPO hopes

HONG KONG (Reuters) – Tencent Music Entertainment (TME) – China’s answer to Spotify (SPOT.N) – is facing crunch time on its hotly anticipated U.S. $2 billion mega IPO this year.

The streaming music giant, which has more than 800 million monthly users, had initially pencilled in an October launch for a U.S. initial public offering (IPO) of up to $2 billion, but decided last month to delay until November in the hope that markets would settle.

Now, the last mega U.S. IPO of the year faces a still-weak mood towards tech stocks and ongoing market jitters ahead of next week’s G20 meeting in Buenos Aires.

Indeed, TME and its advisers have discussed pushing the deal into early 2019, according to two sources involved. No decision has yet been made by the company, they added.

“Of course they want to get the deal done within the year, but meanwhile, they don’t want to rush for the listing. What they care about a lot is (getting) the right valuation, rather than the fast pace of the listing,” said one person involved.

Another source also emphasized the importance of the valuation and said of the market conditions: “We continue to monitor.”

TME declined to comment. The sources declined to be named because the deliberations are not public.

December is not considered an ideal month for large New York IPOs. While Hong Kong and Tokyo often remain busy well into year end – the $21 billion Tokyo IPO of SoftBank’s Japanese telecoms business is due to debut on December 19 – New York traditionally slows late in the year.

In the past decade, U.S. markets have hosted just three IPOs of more than $1 billion in December and the latest of those priced on Dec. 11, according to Refinitiv

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