Oct 25, 2023 1 min read

Hipgnosis Songs Fund confirms it has received no higher offers for catalogue sale

The board of the publicly-listed Hipgnosis Songs Fund have confirmed that they haven’t received any higher offers for the catalogues they are proposing to sell to the Blackstone-backed Hipgnosis Songs Capital

Hipgnosis Songs Fund confirms it has received no higher offers for catalogue sale

The board of the Hipgnosis Songs Fund have confirmed to their investors that they have not received a superior offer for the catalogues they are proposing to sell to Hipgnosis Songs Capital.

That confirmation comes ahead a big vote tomorrow when investors will be asked if they back that sale and whether they want the Songs Fund to continue operating.

The board of the publicly listed Fund proposed the sale of a stack of music rights to the separate Blackstone-backed Hipgnosis Songs Capital last month. The $440 million raised from that deal will be used to buy back shares and service a credit facility, with the aim of boosting the Fund’s flagging share price.

Following the announcement of that proposal, a ‘go-shop’ process was instigated in which other parties could bid for the same catalogues, in an effort to reassure investors in the Fund that the other Hipgnosis entity had offered a fair price.

That process, the Fund’s board said yesterday, resulted in “substantive engagement with a number of parties”, but did not result in a higher bid being made.

“The company was in contact with seventeen parties at the beginning of the go-shop”, the board’s statement continued, “with eight parties signing non-disclose agreements; one first round non-binding offer was received, but did not subsequently result in a binding bid”.

“The board received feedback through the process”, they added, “that a number of the parties assessed that they could not justify paying a higher price than the offer from the buyer for the first disposal”.

With that in mind, the board unsurprisingly recommended that investors back the Hipgnosis-to-Hipgnosis deal.

There has been increased investor scrutiny of the Songs Fund in recent months, with some shareholders and analysts criticising the proposed catalogue sale, and others more generally criticising the Fund’s board and its advisors at Hipgnosis Song Management. The board last week announced a strategic review to allay investor concerns, but it remains to be seen if that works.

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