Concord Music raised its bid to acquire Hipgnosis Songs Fund (HSF) on Wednesday (April 24) to $1.25 a share, a penny higher than a rival offer made by Blackstone on April 20 — further intensifying the race to control the company's musical rights assets.
Concord's new all-cash offering values Hipgnosis' assets — which include rights to songs by the Red Hot Chili Peppers, Christine McVie, Blondie, Shakira and Journey — at about $1.51 billion. It includes a plan to sell up to 30 percent of Hipgnosis' assets within 18 to 24 months of the acquisition, according to a filing with the London Stock Exchange.
HSF's board unanimously recommended that shareholders approve this new offer from Concord, a reversal from Monday (April 22) when those executives said they would support an offer from Blackstone equivalent to $1.24 per share. if the investment giant made it official. Blackstone's offer remains a “potential offer,” according to the company's statement on Saturday (April 20).
“Concord … remains committed to becoming the new owner of Hipgnosis,” the filing states. “The Directors of Hipgnosis believe that the Enhanced Tender Offer is in the best interests of Hipgnosis Shareholders as a whole and therefore unanimously recommend that Hipgnosis Shareholders vote in favor of the resolutions required to implement the Enhanced Tender Offer to be proposed at the Meeting of Court and the General Assembly to be held on or about June 10, 2024.
The new offer represents a 42.6% premium to HSF's closing share price on April 17, the day before Concord's initial offer was made public. Any offer will require the support of investors representing at least 75% of the company's public shares at a court hearing expected to take place on June 10. Until that date, additional new offers may be submitted.
Concord plans to finance the acquisition through a combination of debt and equity, with the majority of the equity financing coming from Concord followed by “minority participation from Apollo Funds.” Apollo will also provide the debt, the amount of which has not been disclosed.
Blackstone presented a “potential offer” of $1.5 billion, or $1.24 per share, to buy the Hipgnosis Songs Fund over the weekend. The private equity giant owns two other entities under the Hipgnosis name, including a private music rights fund with its own catalogs worth more than $700 million. Blackstone has yet to file a formal offer.
Last year, Concord acquired rival Hipgnosis Round Hill Music Royalty Fund for $468 million in the largest catalog deal of 2023. Through this acquisition, Concord acquired rights to more than 150,000 songs, including works by the Beatles and songs they recorded Elvis Presley, Meatloaf, James Brown and Billie Holiday.
