Hipgnosis Songs Fund Board Agrees Takeover Offer from Concord

Hipgnosis Songs Fund Limited (LON: SONG) announced Thursday that it has agreed a takeover offer from Concord Chorus Limited, an entity controlled by Alchemy Copyrights, trading as Concord. The acquisition is valued at approximately $1.4 billion.

Under the terms of the agreement, each scheme shareholder of Hipgnosis will receive $1.16 in cash for each share held. The price is equivalent to £0.932 per share and represents a premium of approximately 32.2% to the closing price of £0.71 on April 17, 2024.

The acquisition is being supported by Concord's long-term financing partner Apollo Global Management, which will provide financing in the form of debt capital and a minority equity interest.

In October 2023, Hipgnosis shareholders voted against continuing as a closed-ended investment company. Following the vote, the company's board said it “carefully assessed all options” for the future of the company to maximise value for shareholders. 

Concord, a renowned music and theatrical rights company, views this acquisition as an opportunity to expand its catalogue and leverage its global operations.

Bob Valentine, CEO of Concord, expressed confidence in the deal, highlighting the premium offer to Hipgnosis shareholders and the potential benefits for composers, performers, and stakeholders.

Robert Naylor, Chairman of Hipgnosis, welcomed the offer as an attractive opportunity for shareholders to realise their investment at a premium. Naylor emphasised Concord's expertise and reputation in the music industry, believing they are well-positioned to manage Hipgnosis' catalogues effectively.

He said the company now encourages Hipgnosis Song Management, the company's Investment Adviser and Blackstone, which is HSM's majority owner, through funds they manage and/or advise, “to agree an orderly termination of the Investment Advisory Agreement.”

“This would enable the payment of a larger consideration under the agreed transaction with Concord and bring to an end a period of uncertainty for all Hipgnosis stakeholders,” added Naylor.

The Hipgnosis board's decision to accept the offer follows a strategic review. The board concluded that the deal presented the most beneficial outcome for shareholders amid market uncertainties and unanimously recommended that shareholders vote in favor of the takeover.

Following the completion of the acquisition, Concord intends to integrate Hipgnosis' assets into its existing portfolio of 1.2 million songs, aiming to maximise value for all stakeholders involved in the music industry.

The acquisition is subject to approval and is expected to be completed in the third quarter of this year.