Round Hill Music Royalty is set to be sold to Alchemy Copyrights for $469m (£375m).
The investment trust’s shareholders will receive $1.15 per share (92p) if the transaction is completed.
The deal will take place via a scheme of arrangement format, and the indicated price represents a 67% premium to the price of RHM shares before the approach was made public. The trust’s board has recommended acceptance of the offer.
The deal is expected to become effective on 1 November.
Alchemy Copyrights, which trades as Concord, has been an ‘active acquirer’ of music rights and companies for over a decade. It has spent $2bn (£1.6bn) buying rights since 2015, and done more than 100 deals.
RHM floated in November 2020 and has amassed a collection of 150,000 songs across 51 music catalogues, including music by Bruno Mars. The collection of ‘carefully selected evergreen music rights’ was chosen based on an ability to generate resilient income, the trust said.
Despite this, the trust has not performed well. Having launched at a price of close to $1, the trust traded broadly flat until summer 2022, before beginning a slide to a low of around 60 cents this past April.
Chair of RHM Robert Naylor, said: “The board is pleased to present this opportunity for liquidity at a premium to both the share price and the IPO price, as well as at a narrow discount to economic net asset value per share. The recommended offer represents excellent value for shareholders.”
Bob Valentine, CEO of Concord, commented: “Since its IPO, RHM has built an impressive portfolio of music rights which generate revenue across a variety of income streams and have demonstrated their ability to stand the test of time.
“As one of the world’s leading music companies with a proven track record of strategic catalogue expansion, Concord has a global team of sync, licensing, marketing, copyright and royalty experts well positioned to maximise the value of this portfolio for all of the songwriters and artists within it.”
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