Hipgnosis board recommends new £1.25bn bid from Blackstone
The board of Hipgnosis Songs Fund (HSF) has recommended a cash acquisition by American private equity giant Blackstone.
Blackstone’s $1.30 (£1.04) in cash per share bid, which is higher than the $1.25 (£1.00) per share revised offer that came from Concord Music last Thursday, values Hipgnosis at about $1.57bn (£1.25bn).
HSF’s board intends to recommend that shareholders accept the offer, saying it has “decided to withdraw its recommendation for the Concord Revised Offer”.
It comes after Blackstone has reportedly been working on finalising a proposal to buy the music royalty investment fund that owns the rights to The Rolling Stones and Shakira over the weekend.
A bidding war between Concord, which is backed by Apollo Global Management, and Blackstone has gripped London-listed Hipgnosis over the last fortnight.
Robert Naylor, chair of Hipgnosis, said: “The Board is pleased to unanimously recommend this US$1.6 billion Offer for Hipgnosis from Blackstone. Since we started our strategic review, we have been clearly focused on looking at all the options to deliver shareholder value.”
He added: “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.”
Hipgnosis shares are currently priced at 103.87p, having jumped up from 70.50p before Concord submitted its initial offer on 18 April.
Qasim Abbas, senior managing director of Blackstone, said: “Our offer price, which has been unanimously recommended by the Board, represents a significant premium to the unaffected share price and allows shareholders to realise immediate and attractive value for their shareholding.”
The senior managing director continued: “The offer is the result of extensive discussion and negotiations with the Board and provides shareholders the certainty of cash today. Blackstone is a long-term investor with deep experience of investing across the media and entertainment sectors, including in music rights.
“The breadth of the Blackstone platform, combined with our operational expertise, will support and enhance the value of the acquired rights.”
The stock rose over 2.3 per cent when the markets opened on Monday.
“Both parties clearly want to be victorious and the investment trust’s board seem happy to switch allegiance to whichever is offering the most money,” said Russ Mould, investment director at AJ Bell.
“Ultimately, the winner could be the one with the biggest chequebook. Long-suffering investors will welcome any extra boost to the takeout price they can get.”