Troubled music investor Hipgnosis, which owns the rights to songs by Blondie, Neil Young, and others, has agreed to sell itself to US music group Concord for $1.4billion (£1.1billion).
The deal values the music investment fund at 93.2p per share, a 4.3 percent premium to its value in September. When it floated in 2018, it was worth £1.3billion. It also owns the rights to songs by the Red Hot Chili Peppers, Beyonce and Shakira.
Chairman Robert Naylor said that given the “substantial financial and governance changes” needed to improve its performance and share price, the offer was an “attractive opportunity” and a low risk way for shareholders to get out with a return.
Hipgnosis’ woes started in September when, under its former management, it agreed to sell a part of its catalogue to its investment advisor, HSM, and private equity giant Blackstone. Shareholders torpedoed that deal, which led to Hipgnosis carrying out a strategic review.
It subsequently rowed with HSM, first over the valuation of its portfolio and then over the “call option” it had to buy the investment fund at a fixed price. It also had a dispute with its founder, music veteran Merck Mercuriadis, who also founded HSM.
Naylor called on HSM and Blackstone to make the deal passing smoother by agreeing to end HSM’s investment advisory role with Hipgnosis. He said doing so would “end a period of uncertainty for all Hipgnosis stakeholders”.
