29 April 2024 , 08:13
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Blackstone has raised its offer to $1.56billion (£1.26billion) in a bid to acquire Hipgnosis Songs Fund, the music rights owner of artists including Beyonce and Mark Ronson.
This move comes amid a fierce takeover battle for the company, with Blackstone emerging victorious over rival suitor Concord. Blackstone's offer of $1.30 per share surpasses Concord's bid of $1.25 per share, prompting Hipgnosis' board to recommend the deal to its shareholders and withdraw their support for Concord's proposal.
The bidding war between Concord, backed by Apollo Global Management, and Blackstone has significantly boosted Hipgnosis' share price, with an increase of over 50% since the battle began in mid-April. Founded in 2018 by former Beyonce manager Merck Mercuriadis and Chic cofounder Nile Rodgers, Hipgnosis holds the rights to some of the music industry's most recognizable assets, including tracks by Blondie, the Red Hot Chili Peppers, and Shakira.
Hipgnosis recommends the improved deal to its shareholders, urging them to take "no further action" regarding Concord's previous offer. However, the deal's approval hinges on investor support.
Robert Naylor, chairman of Hipgnosis, stated: "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 bid for control comes as tensions rise between the Hipgnosis board and its investment adviser, Hipgnosis Songs Management (HSM). Earlier this month, HSM issued a stark warning that it would "use all means necessary" to protect its contractual rights and interests.
This follows Hipgnosis's call for HSM, which is majority-owned by Blackstone, to consent to an orderly end of their investment advisory agreement to facilitate the acquisition process. Blackstone, a global powerhouse in alternative investments with extensive assets in real estate, insurance, and various other sectors, is at the centre of the unfolding drama.
Qasim Abbas, a senior managing director at Blackstone, commented: "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 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."