Today marks the end of an era for Hipgnosis Songs Fund.
The UK-born company, which floated on the London Stock Exchange exactly six years ago (in July 2018), saw its listing officially canceled on the LSE this morning (July 30).
The company is no longer trading publicly in the UK because its assets are now owned by private equity giant Blackstone, which won a long-running and high-profile bidding war with Concord over the acquisition.
On July 8, HSF shareholders voted in favor of Blackstone’s USD $1.584 billion bid for the company at a Court Meeting and General Meeting.
HSF has built a portfolio currently comprising 138 catalogs containing copyright and/or income streams from more than 40,000 songs.
According to a regulatory update issued to the market yesterday (July 29), the “entire issued and to be issued share capital of Hipgnosis is now owned by [Lyra] Bidco”, which is the entity that has technically acquired Hipgnosis.
Lyra Bidco is fully financed by an equity investment from funds advised by affiliates of Blackstone.
An update issued to the market today (Tuesday, July 30) confirmed the cancellation of HSF’s listing: “Further to the announcement made by Hipgnosis and Bidco on 29 July 2024, Hipgnosis confirms that the listing of Hipgnosis Shares on the Official List and the admission of Hipgnosis Shares to trading on the Main Market were each canceled with effect from 8.00 am today, 30 July 2024.”
As reported on Friday (July 26), the acquisition was implemented via a so-called “court-sanctioned scheme of arrangement” under Part VIII of UK Companies Law.
According to the regulatory update issued to the market yesterday, “further to the announcement made on 26 July 2024 that the Court has sanctioned the Scheme, the Scheme Court Order has now been delivered” to the company Registry in Guernsey in the UK.
In other words, the court approved the acquisition, which became effective on Monday (July 29, 2024).
Additionally, as a result of the acquisition becoming effective, Hipgnosis and Blackstone confirmed that as of Monday (July 29), Robert Naylor, Cindy Rampersaud, Francis Keeling, Christopher Mills and Simon Holden have resigned and stepped down from the Hipgnosis Board.
Meanwhile, Hipgnosis Song Management CEO Ben Katovsky and CFO Dan Pounder have been appointed to the Hipgnosis Board.
Following its acquisition of HSF, Blackstone owns two Hipgnosis-branded song portfolios: Hipgnosis Songs Fund (HSF) plus Hipgnosis Songs Capital aka Hipgnosis Songs Assets (HSA).
The latter company (HSA) is the private owner of assets/interests associated with songwriters such as Leonard Cohen, Justin Timberlake, Justin Bieber, Nelly Furtado, and Kenny Chesney.
Both HSF and HSA continue to work closely with their investment adviser, Hipgnosis Song Management (HSM), which is run by CEO, Ben Katovsky.
Blackstone is understood to be the majority-owned of HSM.
Earlier this month, Hipgnosis Song Management announced that the company’s founder and Chairman, Merck Mercuriadis, was stepping away from the firm.
Now that Blackstone’s deal is done and it starts absorbing Hipgnosis’s copyrights, a big question remains about whether it will continue working with HSM as its investment advisor.
In April, HSM slammed criticism from now-former HSF board members over its service to Hipgnosis Songs Fund, but the appointment of Hipgnosis Song Management’s leadership team to the HSF board today could indicate a vote of confidence in HSM from Blackstone.
According to the update issued to the market today: “As a result of the Scheme [the acquisition] having become Effective, share certificates in respect of Hipgnosis Shares have ceased to be valid and entitlements to Hipgnosis Shares held within the CREST systems are being cancelled.
“Applications have been made to the Financial Conduct Authority and the London Stock Exchange in relation to the cancellation of the listing of Hipgnosis Shares from the Official List and for the cancellation of the admission to trading of Hipgnosis Shares on the Main Market, both of which are expected to take effect at 8.00 am (London time) on 30 July 2024.
“As a result of this announcement, Hipgnosis is no longer in an ‘Offer Period’ as defined in the Takeover Code and accordingly the dealing disclosure requirements previously notified to investors no longer apply.”
The update added: “In accordance with the terms of the Scheme, Scheme Shareholders on the register of members of Hipgnosis at the Scheme Record Time, being 6.00 p.m. (London time) on 26 July 2024, will be entitled to receive $1.31 in cash for each Scheme Share held.
“As set out in the Scheme Document, settlement of the cash consideration to which any Scheme Shareholder is entitled will be effected by way of electronic payment or the despatch of cheques or the crediting of CREST accounts (for Scheme Shareholders holding Scheme Shares in certificated form and in uncertificated form respectively) in any event not later than 14 days after the Effective Date (being 12 August 2024).”
In total, Blackstone says it has USD $1 trillion in assets under management today in all sectors, across investment vehicles focused on private equity, real estate, public debt and equity, life sciences, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds.Music Business Worldwide