Among the key news on UK stocks, Hipgnosis Songs Fund Limited (GB:SONG) soared nearly 11%, as of writing, after Blackstone’s (NYSE:BX) bid sparked a takeover battle for the fund. Blackstone, the U.S.-based PE (private equity) company, made a bid worth $1.24 per share in cash for the Hipgnosis Songs Fund over the weekend, surpassing the previous bid of $1.16 made by its rival firm Concord Chorus.
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Today, Hipgnosis announced that it would endorse Blackstone’s superior bid if the PE firm submits a formal offer. However, it added that there is no certainty regarding the submission of Blackstone’s formal offer, and it continues to endorse the offer by Concord Chorus.
Hipgnosis Songs Fund Limited is a closed-ended fund, investing in songs and related musical intellectual property rights.
Hipgnosis Bidding War
Blackstone’s potential offer could ignite a bidding war for Hipgnosis. The PE firm submitted several proposals to the board of Hipgnosis, with the latest offer being $1.24 per share, which represents an 8.8% premium to Friday’s closing price of 91.90 pence and a 6.9% premium to Concord’s offer price.
Meanwhile, Concord’s offer, which is backed by Apollo Global Management (NYSE:APO), represented a premium of approximately one-third to the Hipgnosis share price before the bid was disclosed.
Hipgnosis Shareholders’ Struggles
Hipgnosis has been grappling with challenges since last year. As a result, the company launched a strategic review in October 2023 to consider options that could maximise value for its shareholders. In November, the company appointed advisors to conduct due diligence on its assets and propose alternative terms for its future arrangements.
Last week, Hipgnosis Chairman Robert Naylor stated that the acquisition presents an appealing chance for its shareholders to promptly capitalize on their investments at an enhanced value. He further added that Concord seems to be a suitable owner to acquire the company and the acquisition will be in the best interests of composers and performers.
In the last 12 months, Hipgnosis mutual fund has gained nearly 12%.
