Hipgnosis Music Catalog Fund Sold to Blackstone

Shareholders of Hipgnosis Songs Fund have voted to accept a $1.6 billion takeover offer from US private equity firm Blackstone, according to filings revealed on Tuesday.

The regulatory filing showed an overwhelming approval from shareholders to finalize the deal. This comes at the end of a tumultuous year for the British firm, marked by a bidding war triggered by investor concerns over the plunging share price of the fund.

Merck Mercuriadis, the outspoken chief of Hipgnosis, announced last week that he would step down as chairman of Hipgnosis Song Management following the finalization of the Blackstone acquisition.

Hipgnosis Songs Fund, which went public six years ago as an investment trust on the London Stock Exchange, boasts a portfolio encompassing tens of thousands of tracks.

Mercuriadis had been running the separate management company, where Blackstone invested $1 billion in 2021 to form a partnership.

Hipgnosis significantly influenced the surge in sales of valuable music portfolios, investing large sums in catalogs from artists like Neil Young, Justin Bieber, and Shakira.

Mercuriadis, a seasoned industry executive who has managed the careers of stars like Elton John and Beyoncé, promoted the concept of music as an asset that generates revenue independently of regular market fluctuations.

He co-founded Hipgnosis with guitarist and producer Nile Rodgers.

During the years of high-profile music catalog acquisitions, some industry insiders criticized Hipgnosis for overpaying and inflating prices.

Concerns about the company’s share price and asset valuations last year led to calls for structural changes and the search for an external buyer.

American independent music company Concord had initially reached a tentative agreement to acquire the fund for $1.4 billion, but Blackstone’s higher offer ultimately prevailed.

In announcing his resignation last week, Mercuriadis remarked, “This is a timely opportunity for me to undertake a strategic shift of focus, and to spend more time advocating on behalf of songwriters to ensure that they are properly compensated for their work.”

Source: AFP