The battle for the Hipgnosis Songs Fund heated up further today, as the group manages the fund’s portfolio of hits threatened to use an option to buy up all the fund’s songs if it is cast aside in a potential acquisition.
The fund agreed a takeover deal last week with US-based royalties investor Concord, which has its own management team, meaning it would not require the services of Hipgnosis Songs Management (HSM), which acts as the fund’s investment adviser. Private equity giant Blackstone, which counts HSM as one of its portfolio companies, then made a proposal about a rival bid of its own, which the fund said it would be “minded to” accept.
Today, HSM issued a blistering statement, arguing it has “repeatedly been blamed for many issues affecting the Company which were not HSM’s responsibility under the terms of the IAA. It said: “We have previously sought to address this in private with the Company’s Board as we felt it was in the best interests of shareholders to minimize public commentary. Given recent developments we feel it is now important to make our position clear.”
HSM said that if the fund attempts to terminate its investment agreement, it “will use all means necessary to defend our contractual position and interests. It is important that shareholders, songwriters and artists understand that HSM has acted appropriately and professionally in our role as Investment Advisor and fully in accordance with the IAA.”
It added: “To be clear, were the Company to purport to terminate the IAA and/or hand HSM’s responsibilities under the IAA to a third party, HSM and its majority shareholder are fully resolved to protect all of our rights under the IAA, including the right to exercise the call option to acquire the Company’s assets.”
Analysts at Liberum said they expect the Blackstone bid to win out, should the business make a firm offer.
