Hipgnosis Bidding War Heats Up! Concord Ups Its Offer Against Blackstone to $1.51 Billion
Photo Credit: Hipgnosis Songs Fund
Let the bidding war commence! After getting one-upped by Blackstone, Concord is now back with a slightly better all-cash bid of $1.51 billion.Over the weekend, Blackstone bested Concord Chorusâ $1.4 billion all-cash offer for Hipgnosis Songs Fund Limited with a juicier $1.5 billion offer. Now, Concord is quickly responding with a slightly-better, $1.51 billion offer.
The offer, emailed to Digital Music News moments ago, outlined a revised cash offer of $1.25 per share, a 7.8% increase from its original offer. The offer values Hipgnosis at approximately $1.5115 billion, which edges out Blackstoneâs weekend offer.
In its offer summary, Concord noted that the revised offer represents a significant premium over Hipgnosisâs recent trading price and its Net Asset Value (NAV). Concord also relayed that the Hipgnosis Board of Directors has unanimously recommended the increased offer to Hipgnosis shareholders.Specifically, âConcord Bidcoâ noted that shareholders representing 31.27% of Hipgnosisâs issued shares have already agreed to support the offer. Other shareholders can vote on the deal here.
âWe are pleased to announce this increased offer for Hipgnosis, which has again been unanimously recommended by its Board and has the support of shareholders representing 31.27 percent of Hipgnosisâ issued share capital,â relayed Bob Valentine, CEO of Concord.
âWe continue to believe that this is the best outcome for Hipgnosis shareholders as it provides them with the opportunity to realize their investment in cash at a significant premium to the price where the shares were trading before our bid last week.â
âThe Hipgnosis Directors believe that the Increased Concord Offer is in the best interests of Hipgnosis Shareholders as a whole, and accordingly unanimously recommend that Hipgnosis Shareholders vote in favor of the resolutions required to implement the Increased Concord Offer to be proposed at the Court Meeting and the General Meeting which are due to be held on or around 10 June 2024,â the statement continues.
Concord noted that it would finance the acquisition offer through a combination of debt (provided by Apollo Funds) and its own equity, with Apollo holding a minority position.Scroll down through the various details of the offer, and youâll find this: Concord also noted that it plans to continue its previous plans with Hipgnosis as an asset but may sell up to 30% of the assets within 18 to 24 months.
âThe Increased Concord Offer does not change Concord Bidcoâs intentions as regards Hipgnosis as set out in the Rule 2.7 Announcement, save that Concord Bidco now intends to sell up to 30 percent of Hipgnosisâ assets within 18 to 24 months following completion of the Acquisition,â the offer stated.
The offer shifts the attention back to Blackstone, though Digital Music News is also hearing rumblings of other potential bidders coming forward. Blackstone already owns parts of Hipgnosis, so a successful bid for Hipgnosis Songs Fund would give them more control over the music rights industry.Separately, all eyes are now glued to Hipgnosis Songs Management, which is stubbornly sticking to its contractual rights and signaled its willingness to fight. HSM, Hipgnosis Songs Fundâs investment advisor, appears resolutely ready to protect its position amidst the bidding war.
A key issue is a âcall optionâ in the investment advisory agreement between HSM and HSF. This option would allow HSM to acquire HSFâs assets in specific scenarios, potentially hindering a sale to a third party.
HSM insists that the company cannot legally terminate the agreement without honoring HSMâs contractual rights. In a notice issued this week, HSM clearly stated that they are prepared to take legal action and even exercise the call option to protect their interests.
Separately, Blackstone, which owns a majority stake in HSM, emphasized that its offer for HSF is independent of any influence from founder Merck Mercuriadis.
Looking ahead, the âHSM factorâ could spark legal battles or drive up the price in an intensified bidding process.
Stay tuned.
