Hong Kong — Later this year, China Music is expected to be one of several Chinese internet companies that go public with multibillion-dollar valuations. Executives and bankers believe the online streaming service could be worth as much as $30bn, making it one of the most lucrative deals in the portfolio of Hong Kong-based private equity firm PAG, and its rainmaker Shan Weijian. The PAG CEO, who bought China Music several years ago, will not be the only beneficiary, though. In 2016, he sold half his stake to Tencent at a bargain price and merged China Music with Tencent’s far smaller music streaming operation — the merged entity now carries Tencent’s valuable name. At first glance, a deal with such favourable terms for Tencent might seem strange, but the value of the business lies in the licences to broadcast music, some of which are as short as two years. When they expire, Tencent’s deeper pockets mean it could easily afford to outbid PAG. Joining forces was the lesser evil, Shan sa...

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