Hipgnosis Songs Fund, a UK music rights investment company, has agreed to a $1.4bn takeover by US rival Concord Chorus. After losing a shareholder vote in October, a strategic review was conducted by Hipgnosis, leading to the takeover which values each share at 93p. The deal has already gained support from top shareholders and has caused the group's shares to rise by 30%. Concord aims to integrate Hipgnosis’ catalogues into its portfolio of 1.2mn songs, delivering benefits for composers, performers, and stakeholders.
Key Takeaways
- Hipgnosis Songs Fund, a UK music rights investment company, has agreed to a $1.4bn takeover from US rival Concord Chorus.
- The takeover values each Hipgnosis share at 93p, roughly a third above the group’s closing price on Wednesday.
- The deal has already been backed by a number of top shareholders, representing about 29 per cent of Hipgnosis’ issued share capital.
- Concord, controlled by investor Alchemy Copyrights and is ultimately majority owned by a US pension fund, has invested more than $2.8bn in over 100 transactions to grow its business since 2015.
- The Hipgnosis board has considered all options for the company's future, but the alternatives carried “significant risks, uncertainties, and limitations”.
Analysis
The $1.4bn takeover of Hipgnosis Songs Fund by US rival Concord Chorus will likely impact the UK and US music rights investment industries. This acquisition, stemming from Hipgnosis' strategic review after a failed shareholder vote, indicates a shift in ownership and integration of catalogues. Short-term consequences include the surge in Hipgnosis' shares by 30%, while long-term effects may impact songwriters, performers, and stakeholders involved in the 1.2mn song portfolio. Additionally, Concord's investment history and majority ownership by a US pension fund point to broader financial implications and potential future consolidation within the music investment sector.
Did You Know?
- Hipgnosis Songs Fund's Strategic Review: The strategic review conducted by Hipgnosis after losing a shareholder vote in October led to the company's agreement to a $1.4bn takeover by US rival Concord Chorus. This process involved a comprehensive assessment of the company's future options and ultimately led to the decision to accept the takeover offer.
- Concord's Portfolio Integration: Concord aims to integrate Hipgnosis’ catalogues into its portfolio of 1.2mn songs, which is expected to deliver benefits for composers, performers, and stakeholders. This process involves the consolidation of music rights and assets from both companies, creating potential synergies and opportunities within the music industry.
- Concord's Investment History: Concord, controlled by investor Alchemy Copyrights and majority owned by a US pension fund, has invested more than $2.8bn in over 100 transactions to grow its business since 2015. This demonstrates Concord's significant financial backing and strategic focus on expanding its presence within the music rights investment sector.