Concord Raises Offer in Fight to Take Over Hipgnosis Songs Fund

Concord Music raised its bid to take over Hipgnosis Songs Fund (HSF) on Wednesday (April 24) to $1.25 per share, one penny higher than the competing offer that Blackstone floated on April 20 — further ratcheting up the fight for control of the music rights company’s assets.

Concord’s new all-cash offer values Hipgnosis’s assets — which include rights to songs by Red Hot Chili Peppers, Christine McVie, Blondie, Shakira and Journey — as worth around $1.51 billion. It includes a plan to sell up to 30% of Hipgnosis’ assets within 18 to 24 months of an acquisition, according to a filing with the London Stock Exchange.

HSF’s board of directors unanimously recommended shareholders approve this new bid from Concord, a reversal from Monday (April 22) when those directors said they would support an offer from Blackstone equivalent to $1.24 per share if the investment giant made it official. Blackstone’s bid remains a “possible offer,” according to the company’s statement on Saturday (April 20).

“Concord … remains committed to becoming the new owner of Hipgnosis,” the filing reads. “The 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 favour 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.”

The new offer presents a 42.6% premium over HSF’s closing share price on April 17, the day before Concord’s initial offer became public. Any offer will require the support of investors representing at least 75% of the company’s public shares at a court meeting expected to be held on June 10; until that date, additional new offers may still be lodged.

Concord plans to finance the acquisition through a combination of debt and equity, with the majority of the equity financing coming from Concord followed by “minority participation by Apollo Funds.” Apollo will also provide the debt, the amount of which has not been disclosed.

Blackstone floated a “possible offer” of $1.5 billion, or $1.24 per share, to buy Hipgnosis Songs Fund over the weekend. The private equity giant owns two other entities under the Hipgnosis name, including a private music royalty fund with its own catalog holdings worth more than $700 million. Blackstone has yet to file an official bid.

Last year, Concord acquired Hipgnosis rival Round Hill Music Royalty Fund for $468 million in the biggest catalog deal of 2023. Through that acquisition, Concord gained rights to over 150,000 songs, among them works by The Beatles and tunes recorded by Elvis Presley, Meatloaf, James Brown and Billie Holiday.