Concord and Blackstone are now officially in a bidding war for Hipgnosis Songs Fund‘s assets – as the former company launches a new offer for HSF that (very slightly) trumps its rival’s most recent approach.
Last Thursday (April 18) it was confirmed that Concord had made a cash offer equivalent to USD $1.40 billion to acquire HSF’s assets, or $1.16 per share.
(Concord’s offer is technically being made via Concord Chorus Ltd (CCL), using debt financing from Apollo Global Management.)
Two days later (April 20), Blackstone tabled a proposed cash offer of USD $1.50 billion for HSF’s share capital – or $1.24 per share.
That $1.50 billion figure was around $100 million higher than Concord’s $1.40 billion bid.
Concord, though, isn’t done yet.
Concord has today (April 24) announced that it has reached an agreement with Hipgnosis Songs Fund’s board on terms of a new cash offer.
This time, Concord is offering USD $1.25 per share – equivalent to $1.5115 billion.
HSF’s board is unanimously recommending this offer to shareholders.
Concord’s new offer represents a rise of approximately 7.8% on its previous bid.
However, as you can see from the numbers, Concord’s new bid is, relatively speaking, a mere scintilla higher than Blackstone’s proposal. (Okay, an $11.5 million-sized scintilla, but a relative scintilla nonetheless.)
In fact, Concord’s $1.5115 billion bid is less than 1% bigger than Blackstone’s $1.50 billion proposal.
With debt taken into account, Concord’s new bid values HSF’s assets at approximately $2.117 billion.
Concord’s announcement today contained this important update: “The Increased Concord Offer does not change Concord Bidco’s intentions as regards Hipgnosis as set out in the Rule 2.7 Announcement, save that Concord Bidco now intends to sell up to 30 per cent of Hipgnosis’ assets within a period of 18 to 24 months following completion of the Acquisition.”
So Concord’s bidding bigger than it was before – but intends to subsequently sell nearly a third of the HSF portfolio if its new approach is successful.
According to the statement issued to the market today: “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.”
“We are pleased to announce this increased offer for Hipgnosis, which has again been unanimously recommended by its Board and has the support of shareholders representing 31.27 per cent of Hipgnosis’ issued share capital.”
Bob Valentine, Concord
Commenting on the Increased Concord Offer, Bob Valentine, CEO of Concord, said: “We are pleased to announce this increased offer for Hipgnosis, which has again been unanimously recommended by its Board and has the support of shareholders representing 31.27 per cent of Hipgnosis’ issued share capital.
“We continue to believe that this is the best outcome for Hipgnosis shareholders as it provides them with the opportunity to realise their investment in cash at a significant premium to the price where the shares were trading before our bid last week.”Music Business Worldwide