Blackstone does not intend to raise its latest offer to acquire Hipgnosis Songs Fund (HSF), the London-listed investment trust for which it launched an initial takeover bid on April 20. The private equity firm said in a regulatory filing on Tuesday (June 25) that the financial terms of the June 3 offer “are final and will not be increased” unless a higher bid or potential bid is made.
The announcement appears to be aimed at preventing any attempts by opportunistic investors to outbid Blackstone. Analysis of shareholder data from The Financial Times shows that hedge funds known to trade in takeover targets have acquired “well over” 25% of HSF shares, raising the possibility that Blackstone's offer will fall short of the minimum 75% approval threshold when shareholders vote on it. proposal at the HSF general assembly on July 8.
Blackstone's latest offer of $1.31 per share values HSF's equity at a total of $1.584 billion. After some back and forth with Concord, which offered $1.25 per share on April 24 and $1.14 per share on April 14, Blackstone raised its offer to $1.30 per share on April 29 and then at the current price of $1.31 per share on June 3.
Securing the acquisition will allow Blackstone to consolidate HSF's 65,000 song catalog with two entities it currently owns: music private equity fund Hipgnosis Songs Capital and Hipgnosis Song Management, HSF's investment advisor. The collection of rights held by HSF includes songs by Neil Young, Journey, Lindsey Buckingham, Blondie and more.
A purchase by Blackstone would end HSF's six-year run and the turmoil of recent years. HSF, which began as a pure investment to secure classical music copyrights, has been hit by a stagnant share price that has hurt its ability to raise cash for additional acquisitions. Financial mishaps — such as a wrongful accrual of rights that caused the company to cancel its dividend — and accounting issues led shareholders to vote against going ahead in October and set the stage for board turnover and a plan to attract bidders to satisfy shareholders.
