Blackstone Outbids Concord with $1.6 Billion Offer for Hipgnosis Songs Fund

Blackstone, a US private equity firm, has outbid rival Concord with a $1.6 billion takeover offer for the struggling UK music rights owner Hipgnosis Songs Fund. Hipgnosis manages the rights to catalogues of artists like Justin Bieber, Shakira, and Neil Young.

Blackstone's offer of $1.30 per share values Hipgnosis at around $1.57 billion, which is higher than Concord's previous $1.25 per share bid worth $1.5 billion. The Hipgnosis board has unanimously recommended the Blackstone deal, which is expected to be finalized in the third quarter of 2024.

The acquisition comes as Hipgnosis has been plagued by concerns over asset valuations. The company recently slashed the value of its songs catalogue by more than a quarter to $1.93 billion after revealing a tripling of its first-half net losses due to tumbling sales.

Why this matters: The bidding war for Hipgnosis highlights the growing interest in music rights as an investment asset class. The outcome could have significant implications for the music industry and the future valuation of song catalogues.

Blackstone is a long-term investor with experience in the music business, including investments in Hipgnosis Song Management and Hipgnosis Songs Capital. In a statement, Blackstone said it expects to complete the acquisition during the third quarter of 2024, subject to conditions.

The deal would mark the end of a turbulent six-year period for Hipgnosis as a listed company in London. Founded in 2018 by Merck Mercuriadis, the company used his industry connections to acquire the rights to over 40,000 songs across 138 catalogs. However, Hipgnosis faced challenges due to rising interest rates and changes in song valuations.

Key Takeaways

• Blackstone outbids Concord with $1.6B takeover offer for Hipgnosis Songs Fund.
• Hipgnosis manages rights to catalogs of artists like Bieber, Shakira, and Young.
• Blackstone's offer values Hipgnosis at $1.57B, higher than Concord's $1.5B bid.
• Acquisition highlights growing interest in music rights as investment asset class.
• Hipgnosis faced challenges due to rising rates and changes in song valuations.