China's Tencent Music falls as traders flag Ximalaya deal concerns

Tencent Music Entertainment

11/06/2025 05:38

** Tencent Music Entertainment Group 1698.HK (TME) slips 2.7% to HK$71.65; set for biggest one-day pct drop since May 30

** Traders flag concern over dilution after co plans to settle acquisition in cash-and-stock deal, while profit booking capped rise

** Tencent's 0700.HK music-streaming subsidiary to buy domestic long-form audio platform Ximalaya XIMA.N in ~$2.4 billion cash-and-stock deal, gaining access to diverse creator network

** TME to offer Class A shares, not exceeding 5.2% of its total outstanding stock, and $1.26 billion in cash

** Issue shares to Ximalaya's founder investors not more than 0.37% of its total share count

** Citi ("buy") remains positive on co's resilient subscription revenues with upside from ad monetisation

** Believes integrating Ximalaya assets will strengthen co's long-form audio/podcast positioning, enrich its offering, enhance monetisation

** YTD, TME stock gains 64.5%

 (Reporting by Donny Kwok)

 ((donny.kwok@thomsonreuters.com))