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Hipgnosis Songs Fund Board Likes Blackstone’s ‘Possible’ $1.5 Billion Bid

By Michael Apr 22, 2024

Hipgnosis Songs Fund’s board of directors said on Monday that it would support a takeover bid from Blackstone if the private equity giant officially files its $1.5 billion offer for the music royalty fund.

Blackstone said on Saturday (April 20) in what it called a “possible offer” that it was prepared to bid $1.24 per share, or roughly $1.5 billion, all-cash for the troubled music royalty fund, which represents a 8.7% premium over the stock’s last closing price. Blackstone’s bid comes two days after Nashville-based Concord Music offered $1.4 billion.

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The London-listed fund that owns rights to songs by Neil Young, Journey, Lindsey Buckingham, Blondie and other artists has seen its share price plummet as its portfolio value was slashed and investor dividends were cut. In saying that it would support the higher offer on Monday, the board of directors appeared to be signaling to shareholders that it would take the most expeditious route to get them the highest return.

“The Board, having reviewed the Proposal with its financial adviser … has indicated to Blackstone that the Proposal is at a value that it would be minded to recommend to its shareholders should Blackstone announce a firm intention to make an offer,” Hipgnosis Songs Fund’s board of directors said in the filing.

The board was careful to say it cannot be certain Blackstone will make an official offer, but said it will “continue to provide Blackstone and its advisers access to confirmatory due diligence, to enable Blackstone to announce a firm intention to make an offer, as soon as possible,” it said.

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Until then, the Hipgnosis directors continue to unanimously recommend to shareholders Concord’s offer.

Any deal requires a three-quarters majority of shareholder support. Last week, the board and institutional investors representing 30% of the fund’s outstanding shares said they supported Concord’s bid.

That proposed deal, made public on Thursday (April 18), valued each Hipgnosis share at £0.93 ($1.14), a premium of roughly one third the fund’s prior-day closing price.

By Michael

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