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Hipgnosis Songs Fund Board Now Backs Blackstone’s $1.6 Billion Acquisition Bid

Concord's offer of $1.25 per share has been rejected, with HSF directors now recommending shareholders go with Blackstone.

Hipgnosis Songs Fund logo
Hipgnosis Songs Fund logo
Pavlo Gonchar/SOPA Images/LightRocket/Getty Images

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, Blackstone and HSF’s board of directors said they approved of the revised all-cash takeover of all Hipgnosis shares, valuing the company and its portfolio of catalogs by Red Hot Chili Peppers, Neil Young, Shakira and others at roughly $1.572 billion.


By beating Concord’s most recent bid by around 4%, Blackstone will likely win the three-quarters majority of shareholder support it needs to approve the takeover when investors meet for a vote in June.

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However, the bidding war was almost fated to end in the investment fund’s favor because of a call option that said Hipgnosis Song Management (HSM), which is Hipgnosis Songs Fund’s investment adviser and which is majority owned by Blackstone, had the right to match any competing offer to takeover the company.

Given Blackstone’s trump card, it is not immediately clear what drove the bidding higher. But Blackstone’s official bid arrives one week after it 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 approve 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.”

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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.

Additional reporting by Elizabeth Dilts Marshall.

This article was originally published by Billboard U.S.

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Not By Choice on MuchOnDemand on MuchMusic in 2002.
Courtesy Photo

Not By Choice on MuchOnDemand on MuchMusic in 2002.

FYI

Obituary: Mike Bilcox of Ajax, Ontario Pop-Punk Band Not By Choice

Former drummer and now head of Round One Sports & Entertainment Liam Killeen pens this tribute to his former bandmate, with words from The Feldman Agency's Jeff Craib, Sum 41's Dave Baksh, Simple Plan's Chuck Comeau and more.

Mike Bilcox, lead singer and guitarist of Ajax, Ontario’s second most famous pop-punk band, Not By Choice, passed away on June 21, at age 48.

Mike started Not By Choice with his Ajax High School friend Glenn ‘Chico’ Dunning back in 1997. They had initially played a few shows under different names that may or may not be suitable for print, but our moniker came from Mike bothering his younger sister Chrissy at the dinner table. When she couldn’t take any more of his taunting, she promptly told her Mom, Pat, that he was annoying her – Pat yelled ‘Well, he’s your brother!’ to which Chrissy quickly replied ‘Yeah, not by choice!’. With that, a real band was born.

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