Hipgnosis Shareholders Just Got a (Slightly) Better Deal — Blackstone’s Lyra Bidco Settles on Improved Offer, Targets Q3 Close

Hipgnosis songs fund
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Hipgnosis songs fund
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Photo Credit: Hipgnosis Songs Fund

Every penny counts: Blackstone’s Lyra Bidco has raised its takeover offer for Hipgnosis Songs Fund (HSF) by one cent per share.

HSF confirmed the slightly increased bid via a formal release today, a little over two weeks after Concord officially bowed out of the acquisition battle. This high-stakes competition for the entirety of Hipgnosis Songs Fund – encompassing the rights to the work of Shakira, Barry Manilow, Timbaland, and a number of others – seemingly marks the final chapter in the entity’s turbulent story.

As we’ve covered each step along the way, that tumult includes a dispute between HSF investors and management, with Blackstone-powered Hipgnosis Song Management (HSM) serving as the publicly traded songs fund’s “investment adviser.”

Following some clever maneuvering from HSF’s revamped board, which successfully brought Concord to the table despite the less-than-ideal terms of the HSM investment advisory pact, Blackstone settled on a $1.30-per-share bid in late April. Coming out to nearly $1.6 billion overall (Blackstone will also take on HSF’s sizable pile of debt), that offer promptly secured a recommendation from HSF directors.

However, shareholders are now set to receive a bit more than that, at $1.31 (£1.02 at the present exchange rate) per share and $1.584 billion overall, the company has revealed.

According to the board, this uptick “in part reflects Hipgnosis incurring lower adviser fees in respect of the transaction than previously expected.” Predictably, HSF directors have unanimously recommended that investors back the improved offer.

Meanwhile, the involved parties have been hammering out logistical and regulatory considerations behind the scenes, including with an “A&R cooperation agreement,” and expect the acquisition to wrap sometime during the third quarter.

Closer to the present, Hipgnosis stock (LON: SONG) is currently worth £1.01 per share ($1.29 at the present exchange rate). Up materially from about 58 pence per share earlier in 2024, the sum nevertheless represents a substantial dip from the all-time high that SONG hit at its late-2021 peak.

In any event, the present outcome is undoubtedly preferable for HSF shareholders to the other possibilities we’ve seen, referring in part to the proposed sale of a select few catalogs to Hipgnosis Songs Capital for $440 million. (The would-be deal was shot down in a vote, as was the continuation of the overarching songs fund.)

On that front, Hipgnosis Song Management itself also owns several significant bodies of work that aren’t part of the HSF sale. And with the continued benefit of Blackstone capital, HSM will presumably keep on pursuing song rights deals moving forward.