Blackstone Prepares £1.2 Billion Bid for Music Rights Owner Hipgnosis

Blackstone, a leading private equity firm, is preparing a £1.2 billion bid to acquire Hipgnosis, a company that owns the music rights to artists like Blondie. The potential acquisition would be a significant move in the growing market for music rights, as investors seek to capitalize on the steady revenue streams generated by music catalogs.

Hipgnosis, a British music royalties fund, has been expanding its portfolio of music catalogs in recent years. However, the company has faced challenges, including a tumbling share price, valuation errors, and constant feuds between its board, shareholders, and founder Merck Mercuriadis.

The potential acquisition by Blackstone follows years of internal discord within the private equity firm over whether it should go public. Despite this, Blackstone's dealmaking machine is revving up, with the company deploying $24.5 billion in the first quarter of 2023, more than twice the amount invested in the same period a year ago.

Why this matters: The potential acquisition of Hipgnosis by Blackstone signals a resurgence in private equity dealmaking and highlights the growing interest in music rights as a valuable asset class. The deal could have significant implications for the music industry and the way music royalties are managed and monetized.

The deal is expected to close in the third quarter of this year and has the backing of almost a quarter of Hipgnosis shareholders. Concord Chorus Group, backed by U.S. private equity firm Apollo, has agreed to acquire Hipgnosis for $1.4 billion, with the takeover being supported by Concord's long-term financing partner, Apollo. The deal represents another blow to the U.K.'s premium stock market, as a U.S. business is acquiring a domestic company.

Several top law firms, including Latham & Watkins, Reed Smith, Shoosmiths, DLA Piper, and Ashurst, are advising on the transaction. The acquisition of Hipgnosis by Blackstone is part of a broader trend of private equity firms investing in music rights, as they seek to capitalize on the stable and predictable revenue streams generated by music catalogs in an era of streaming and digital consumption.

Key Takeaways

• Blackstone, a private equity firm, plans to acquire Hipgnosis for £1.2 billion.
• Hipgnosis, a British music royalties fund, has faced challenges like share price drop.
• Blackstone's dealmaking surged, investing $24.5 billion in Q1 2023, more than double 2022.
• Concord Chorus Group, backed by Apollo, agreed to acquire Hipgnosis for $1.4 billion.
• The deals signal a resurgence in private equity's interest in music rights as an asset class.