Hipgnosis Songs fund has received a $1.5bn (£1.2bn) bid from private equity firm Blackstone, rivalling a proposal from Concord put forward last week.
While a firm offer is yet to be made, the trust’s board said it would be minded to recommend the offer for its entire issued share capital should Blackstone firm up the proposal.
Blackstone is the majority owner of the trust’s investment adviser, Hipgnosis Songs Management (HSM). The firm said it has made a series of proposals to Hipgnosis, with the latest offer its fourth attempt.
“Blackstone strongly encourages the board of Hipgnosis to recognise the significant increase in value available to all shareholders under the terms of its fourth proposal, over the $1.16 as set out in the Concord offer, and to work with Blackstone to reach agreement on a unanimously recommended firm offer in an expeditious manner,” the firm said.
Blackstone also noted the ‘call option’ held by HSM, which gives HSM the right to purchase the trust’s portfolio if its position as investment adviser is terminated.
HSM has previously refused to remove the option despite calls from the trust’s board.
“Blackstone and its portfolio company HSM, having taken extensive legal advice, remain confident in the enforceability of the Option. Blackstone is seeking to find a positive outcome for all shareholders at a fair and reasonable value; however, Blackstone and HSM value the contractual protections under the IAA and will vigorously defend HSM’s rights pursuant to the Option if required to do so,” Blackstone added.
In October 2023, Hipgnosis shareholders rejected the proposed sale of 29 music catalogues for $440m to Blackstone-backed private equity vehicle Hipgnosis Songs Capital.
Concord bid
Last week (18 April), Concord Chorus Limited (Bidco) – an entity controlled by Alchemy Copyrights – launched a bid to to purchase the entire issued share capital of the Hipgnosis Songs fund.
Concord’s proposed deal values the entire capital of Hipgnosis at $1.4bn, which equates to $1.16 (£0.932) per share.
The offer represents a premium of 32.2% to its closing price on 17 April, according to QuotedData, or a 4.3% premium relative to the adjusted operative NAV as at 30 September last year.
The firm purchased fellow music royalties investment trust, Round Hill Music, in 2023.
