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Concord outbids Blackstone for rights to songs by Shakira, Justin Timberlake

By Louis Goss

Hipgnosis Songs Fund has found itself at the center of a private-equity fuelled bidding war between Blackstone and Apollo-backed Concord Music Group following the Nashville music producer's new offer to pay $1.5 billion for the London-listed music investor.

Concord's offer to fully-acquire Hipgnosis for $1.25 per share in cash saw it outbid the $1.24 per share from Blackstone which submitted its own bid earlier this week to buy the company which owns the rights to hit songs by Justin Timberlake and Shakira.

Blackstone's bid itself was a counter offer to Concord's initial bid, which saw the U.S. music producer offer $1.16 per share to fully acquire Hipgnosis on April 18, in a deal that valued the company at $1.4 billion.

Shares in Hipgnosis Songs Fund UK:SONG increased 2% on Thursday having gained 46% since the announcement of Concord's original offer. Stock in the company had previously fallen to all-time lows in March after losing more than 40% of its value since its London Stock Exchange debut in July 2018.

In a statement on Thursday, Blackstone responded to Concord's new offer, with the private equity giant calling on investors to "take no action" and said it is "considering its options" and that a "further announcement will be made in due course."

Blackstone, which previously invested $1 billion into a partnership with Hipgnosis' advisor - Hipgnosis Song Management - in 2021, is still yet to make a binding offer for the London-listed company as per U.K. takeover rules.

As such, Concord's offer, which was announced late on Wednesday and has now received unanimous backing from Hipgnosis' board, remains the only firm offer on the table.

Concord's bid values Hipgnosis at $1.51 billion, versus the $1.4 billion sum it initially offered to pay on April 18, while marking a 42.6% premium on the music company's share price on April 17 before its first bid was announced.

Hipgnosis, which was founded by guitarist Nile Rogers and his manager Merck Mercuriadis, has since its formation in 2018 aimed to buy up rights to hit songs with a view to using income from royalties to generate returns for shareholders.

The Guernsey registered company is seeking to capitalize on growth in the value of the songs it owns which it believes will be driven upwards by the growth of the global music streaming market.

-Louis Goss

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.


(END) Dow Jones Newswires

04-25-24 0559ET

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