Concord Chorus Limited offers to acquire Hipgnosis Songs Fund for $1.4 billion

LONDON, UK: Concord Chorus Limited and the board of Hipgnosis Songs Fund have announced a definitive agreement for a recommended all-cash acquisition. The transaction will see Concord Chorus acquire the entire issued and to be issued share capital of Hipgnosis. The acquisition, valued at approximately US$1.402 billion, is set to be executed through a Court-sanctioned scheme of arrangement, aligning with Part VIII of the Companies Law.

Shareholders of Hipgnosis are poised to receive US$1.16 per share in cash consideration.

Furthermore, a contingent consideration of up to US$25 million is on the table, subject to the termination of the Investment Advisory Agreement before the court hearing. If applicable, this additional consideration will be distributed among the shareholders, potentially adding up to US$0.020 per share.

The cash consideration reflects a 32.2% premium over the closing price of £0.71 on April 17, 2024, and a 36.5% premium over the six-month volume-weighted average price. It also represents a 4.3% premium over Hipgnosis’ adjusted operative NAV per share as of September 30, 2023.

This strategic move is expected to reshape the competitive landscape of the music rights industry, with Concord Chorus poised to solidify its position through this acquisition.

Concord has been an active acquirer of music rights and companies for over a decade, with a proven track record of strategic acquisitions and catalogue expansion. Since 2015, Concord has deployed more than US$2.8 billion of capital and completed more than 100 transactions across recorded music, music publishing and theatricals, as it seeks to grow its business and scale and leverage its operations.

Concord is a full-service music and theatrical rights company with an extensive new release artist and writer programme. Concord’s global team provides artists, songwriters, playwrights and composers with creative and administrative support in sync, licensing, marketing, promotion and A&R.

Robert Naylor, Chairman of Hipgnosis said: “The Board is pleased to announce and unanimously recommend this US$1.4 billion Offer for Hipgnosis from Concord. The acquisition represents an attractive opportunity for our shareholders to immediately realise their holding at a premium, mitigating the risks we see ahead to achieving a material improvement in the share price.

At the same time, the Board is confident that Concord, one of the world’s leading independent music companies, is the right owner to take on the Hipgnosis catalogue and manage it in the interests of composers and performers.

We would now encourage Hipgnosis Song Management, the Company’s Investment Adviser and Blackstone, which is HSM’s majority owner, through funds they manage and/or advise, to agree an orderly termination of the Investment Advisory Agreement. This would enable the payment of a larger consideration under the agreed transaction with Concord and bring to an end a period of uncertainty for all Hipgnosis stakeholders.”

Bob Valentine, CEO of Concord said: “We are pleased to be announcing this Offer for Hipgnosis, which has been unanimously recommended by its Board and has the support of 29.38 per cent. of their shareholders. We believe we are offering a fair price for Hipgnosis’ catalogues and music assets, giving its shareholders the opportunity to realise their investment at a significant premium to the prevailing share price in cash.

Concord is the world’s leading independent music company, with extensive experience in developing, producing, and marketing recordings and songs around the world in order to maximise their value. We believe we can integrate Hipgnosis’ catalogues into our wider portfolio of 1.2 million songs in a way that will deliver benefits for composers, performers and all our stakeholders.”

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