Kuke stock soars after acquiring controlling stake in Naxos Music Group

Investing.com -- Kuke Music Holding Limited (NYSE:KUKE) stock soared 240% in after-hours trading Thursday following the company’s announcement that it has acquired a controlling stake in Naxos Music Group, one of the world’s largest independent classical music companies.

The Chinese classical music services platform completed two transactions totaling approximately $106.35 million to secure a 70.43% interest in Naxos One Holding Limited, which controls Naxos Music Group. The acquisition was settled entirely through the issuance of Kuke’s Class A ordinary shares.

Under the terms of the agreements signed on September 17, Kuke first subscribed for 17,500 newly issued Class B ordinary shares of Naxos One at $6,000 per share, for an aggregate consideration of $105 million. The company then acquired 108 Class A ordinary shares from existing shareholder Desun Holding Limited at $12,500 per share, totaling $1.35 million.

Kuke issued approximately 653 million Class A ordinary shares to Naxos One and 8.4 million shares to Desun as consideration for the transactions. Each share was valued at $0.1608, based on the average closing price of Kuke’s American Depositary Shares for the 60 trading days preceding the agreement, discounted by 30%.

"This strategic acquisition of Naxos Music Group represents a landmark transaction that will significantly enhance our position as a leading classical music services platform," said Peixian Tan, Chairman and CEO of Kuke. "Naxos’s world-class content library, combined with its proven global distribution capabilities, creates compelling synergies with our existing music education and technology platforms."

Naxos Music Group, established in 1987 and headquartered in Hong Kong, has grown to become a leading classical music label with a global distribution network. The company pioneered digital music streaming in 1996 and operates through numerous owned subsidiaries and distributors worldwide.

The transaction has been approved by Kuke’s shareholders, Board of Directors, and Audit Committee following review of an independent valuation report.

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