Blackstone saw Concord’s most recent offer of $1.25 per share to acquire Hipgnosis Songs Fund and raised it a nickel to $1.30 on Monday, potentially putting a capper on a back-and-forth bidding war for the music rights company’s assets.
In a joint announcement, HSF and Blackstone said the board of directors of both companies approved of the revised all-cash acquisition of Hipgnosis’s assets at a value of nearly $1.6 billion, up from Concord’s most recent bid that valued the company at around $1.51 billion.
The new price reflects a 48.1% premium over HSF’s closing share price on April 17, the day before Concord’s initial offer became public. Any offer will require the support of investors representing at least 75% of the company’s public shares at a court meeting expected to be held on June 10; until that date, additional new offers may still be lodged.
Blackstone’s official bid arrives a week after the private equity giant made what it called a “possible offer” of $1.24 per share, or roughly $1.5 billion, on April 22. HSF’s board of directors signaled that they would support that bid if it was made official, however two days later (April 24) Concord raised their bid by one penny and the board reversed and unanimously recommended shareholders approve the Concord bid.
With Blackstone upping the bid by $0.05, the board now says that “after careful consideration” the revised bid “represents a superior offer for Hipgnosis shareholders” compared to Concord — and now will recommend shareholders to access the new terms.
“The Board is pleased to unanimously recommend this [offer] for Hipgnosis from Blackstone,” said Hipgnosis chair Robert Naylor. “Since we started our strategic review, we have been clearly focused on looking at all the options to deliver shareholder value. We are delighted that, following competitive interests in acquiring Hipgnosis, our investors now have a chance to immediately realise their holding at an increased premium.”
The London-listed fund owns rights to songs by Neil Young, Journey, Lindsey Buckingham, Red Hot Chili Peppers, Shakira, Blondie and other artists.
Hipgnosis Songs Fund’s stock price fell 6.75% on the news, from $1.35 on Friday when Concord’s bid increase pushed the stock to a 52-week high to $1.26 by 9 a.m. Monday New York time.
Blackstone is also the majority owner of Hipgnosis Songs Fund’s investment adviser, Hipgnosis Song Management (HSM), and it funds Hipgnosis Songs Capital (HSC), a private music rights fund operated with HSM that has its own portfolio of music rights from such stars as Justin Bieber and Kenny Chesney.
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