Blackstone, the North American private equity giant, is finalizing a revised offer this weekend to buy the company that owns the music catalogs of Shakira and Red Hot Chili Peppers.
Sky News has learned that Blackstone is preparing to present an enhanced bid for the Hipgnosis Songs Fund (HSF) as early as Monday.
His offer will exceed the one recommended by HSF’s board last Thursday of $1.25 per share for Concord Music, a larger rival, according to sources.
The latest salvo in an increasingly intense bidding war will underline the two bidders’ growing determination to prevail in a battle for some of the global industry’s best-known assets.
HSF also has songs performed by artists Blondie and Kaiser Chiefs.
Sky News revealed last weekend that Blackstone had already submitted three offers to buy the London-listed music rights investment company, with a fourth immediately following.
The bid was outbid a few days later by Concord, which is backed by Apollo Global Management.
Sources said Blackstone was considering what they described as a significant upgrade to Concord’s offer, although the exact level of the offer under consideration was unclear.
A takeover of the company would crystallize value for Hipgnosis shareholders, who saw the shares fall to an all-time low in March of around 56p, following a reduction in the value of their portfolio and a suspension of dividend payments.
HSF’s problems have played out for months in the public arena, culminating last October with a decision by shareholders to reject its board’s aim of securing their support for its continuation.
The company has been mired in bitter recriminations and legal arguments over its performance and governance.
An analysis conducted by Shot Tower Capital, a specialist consultant, concluded in March that SONG’s assets were worth a fifth less than Hipgnosis Song Management (HSM), its investment adviser, had reported last September.
Blackstone is already deeply immersed in HSF’s future because it owns a 51% stake in HSM, which has a contract to manage SONG’s assets.
HSM has a call option in its management contract with HSF that allows it to acquire the portfolio of musical assets even if the Concord Chorus is successful, for the same price it pays.
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The purchase option would be void if the management contract was terminated for just cause.
The remainder of HSM is owned by Merck Mercuriadis, the former manager of Beyoncé and Sir Elton John, who launched Hipgnosis in 2018 with the aim of transforming music royalties into a mainstream asset class.
Three years later, he struck a $1 billion deal with Blackstone to provide firepower for purchasing music rights and managing catalogs.
In February, Mercuriadis moved from the role of CEO of HSM to the role of president, with Ben Katovsky taking over as CEO.
Blackstone’s interest in acquiring HSF is separate and independent from Mr. Mercuriadis.
This approach could cast doubt on the acquisition giant’s ongoing relationship with the Hipgnosis founder.
Blackstone is being advised by investment bankers from Jefferies, while JP Morgan is among the investment banks advising Concord.
HSF shares closed on Friday at 103.8p, giving it a market capitalization of just over £1.25 billion.
On Sunday, Blackstone and HSF declined to comment.
This story originally appeared on News.sky.com read the full story
