On Thursday, London-listed Hipgnosis Songs Fund, the music intellectual property investment company co-founded by Merck Mercuriadis and Nile Rodgers in 2018, announced that its board has recommended a sale to music rights investor Concord, valuing the firm at $1.4 billion.
Shares of the FTSE 250 constituent soared by 31% at 8:30 a.m. U.K. time on Thursday.
Hipgnosis has acquired song rights for renowned artists such as the Red Hot Chili Peppers, Beyoncé, Mark Ronson, Shakira, Neil Young, and Blondie. However, it has faced challenges with financial reporting issues, and its pre-tax operating loss widened in 2023 to $86.63 million.
The valuation amounts to £0.932 ($1.16) per share, representing a 32.2% premium over Wednesday’s closing price. Financing for the deal will be facilitated by Concord’s partner, Apollo Capital Management, the U.S. private equity behemoth.
In a joint statement, the companies highlighted Concord’s successful track record in strategic acquisitions and catalog expansion, emphasizing the benefits the deal would bring to the creators associated with the rights.
Furthermore, the statement emphasized the need for substantial financial and governance changes to enhance Hipgnosis’s financial performance and achieve a significant improvement in the share price.
