The already-complicated battle over control of Hipgnosis Songs Fund grew even more so on Saturday, as the private equity firm Blackstonebid $1.5 billion to the troubled fund — which includes the rights to catalogs by Neil Young,Shakira, Blondie, Journey,Lindsey Buckingham and others —pushing aside Concord’s $1.4 offer made earlier in the week.
Blackstone already owns two other elements of Hipgnosis — the investment fund Hipgnosis Songs Capital and the advisor Hipgnosis Song Management — and the move reflects founder Merck Mercuriadis’ determination to retain control of the company.
As noted by Music Business Worldwide, Blackstone’s offer is not yet “firm” — it is just a proposal —but if it is accepted, a firm offer would likely follow.
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“Blackstone strongly encourages the Board of Hipgnosis to recognise the significant increase in value available to all shareholders under the terms of [the $1.24-per-share offer], over the $1.16 as set out in the Concord Offer, and to work with Blackstone to reach agreement on a unanimously recommended Firm Offer in an expeditious manner,” the company said in a statement.
These moves take place after months of upheaval at Hipgnosis, which had launched a strategic review last year after a revolt by shareholders over a planned catalog sell-off and other business plans.
Hipgnosis, founded in 2018, helped drive the price of music catalogs to new heights by paying top dollar to acquire catalogs from a large number of top producers and songwriters, with Mercuriadis often saying that music catalogs were as valuable an asset as oil or gold. The market followed, spurring a gold rush on catalogs that drove up their value enormously — Hipgnosis paid a reported $100 million for half of Neil Young’s songs catalog; in separate deals Bob Dylan and Bruce Springsteen reportedly were paid as much as four to six times that for theirs — but grew overextended as investors questioned Hipgnosis’ ability to exploit the catalogs it had acquired.
Adding to its woes, interest rates rose and the price of available catalogs grew untenably expensive; Hipgnosis’ value plunged to at times less than half of its 2021 peak of $2.6 billion, according to Citrin Cooperman.
PvNew will have more on this news as the situation develops.
