Apollo-backed Concord has bowed out of a bidding battle for Hipgnosis Songs Fund after saying it will stick with its lower offer, despite being outbid to buy the music rights owner of artists including Beyonce and Mark Ronson
Blackstone looks set to emerge victorious in its battle for Hipgnosis Songs Fund, after rival bidder, Apollo-backed Concord, decided not to raise its bid.
Despite competing fiercely to buy the music rights owner of artists such as Beyonce and Mark Ronson, Concord recently announced it will stick with its lower offer. Towards the end of last month, Hipgnosis accepted a greater $1.56billion (£1.25billion) takeover proposal from American private equity firm Blackstone, adding more drama to the ongoing takeover struggle.
Blackstone’s £1.04-a-share bid (corresponding to $1.30 ), which outperformed Concord’s £1-a-share offer ($1.25), has secured the approval of the Hipgnosis board. This Thursday, Concord, indirectly controlled by Alchemy Copyrights – the company that bought Hipgnosis competitor Round Hill Music last year – stated that its bid is “final and will not be increased”.
The aggressive contest between Concord and Blackstone has lately rallied the share price of the music rights mogul, causing an impressive 50% bump since it began mid-April. Based in the US, Concord kicked off the bidding war on April 18 with an initial offer totalling £1.12billion, which was promptly outdone by Blackstone’s £1.2billion counteroffer.
Concord retaliated with another proposal amounting to $1.51billion US (£1.21billion), backed by the Hipgnosis board in their recommendation to shareholders. However, Blackstone again topped that with its superior bid. Interestingly, Blackstone also holds the majority share in Hipgnosis’s investment consultant, Hipgnosis Song Management (HSM), which provides management services to the fund’s artists and songwriters.
Hipgnosis Songs Fund (HSM) has the option to up its bid for the Hipgnosis portfolio if their advisory agreement is terminated. Blackstone has clarified that its proposal stands independently of HSM’s actions. Launched by Beyonce’s ex-manager Merck Mercuriadis and Nile Rodgers of Chic fame in 2018, Hipgnosis boasts ownership over a treasure trove of iconic music industry assets.
Their impressive catalogue includes rights to songs from legendary acts such as Blondie, Red Hot Chili Peppers, and Shakira. Investor approval is essential for any potential transaction to proceed. Tensions are mounting between Hipgnosis’ board and HSM, with the relationship growing increasingly fraught. Earlier this month, HSM issued a stark warning, stating it would “use all means necessary” to protect its contractual rights and interests.
This comes on the heels of Hipgnosis urging HSM to consent to an orderly end to their investment advisory contract to facilitate the deal’s success. Blackstone, a global behemoth in alternative investments, has extensive interests across real estate, insurance, and various other domains.
