Blackstone Makes $1.5 Billion Bid for Hipgnosis Songs Fund

Blackstone has made a potential offer to acquire Hipgnosis Songs Fund for about $1.5 billion, outbidding Apollo-backed Concord.

The bid has triggered a takeover battle for the owner of music rights by artists such as Shakira and Red Hot Chili Peppers.

Market Response:

Hipgnosis shares rose by 10% to 1.01 pounds ($1.25) in early trade, reaching their highest level since September 2022.

Blackstone’s latest proposal values Hipgnosis at $1.24 per share in cash, exceeding Concord’s bid of $1.16 per share.

Strategic Considerations:

Hipgnosis has indicated that it would recommend a higher bid from Blackstone if the private equity firm tables a formal offer.

Blackstone is already the majority owner of Hipgnosis Songs Management (HSM), the fund’s investment adviser, and has a call option to purchase Hipgnosis’s portfolio of songs.

Portfolio Assets:

Hipgnosis Songs Capital (HSC), a partnership between HSM and Blackstone, owns music rights to artists such as Justin Bieber, Nelly Furtado, and Justin Timberlake.

Hipgnosis initiated a strategic review last year after facing shareholder dissent, leading to disputes over the call option with HSM.

Road Ahead:

The board and advisers of Hipgnosis will continue to provide Blackstone access to confirmatory due diligence, enabling Blackstone to announce a firm intention to make an offer as soon as possible.

Shareholders previously rejected a $440 million deal to sell catalogs to HSC in October, citing valuation concerns.