Music royalties leader Hipgnosis has agreed to a (£1.1bn) takeover by Alchemy Copyrights.
The company, which holds the back catalogues of artists like Justin Bieber and Shakira, initiated a strategic review last year to explore a potential sale among other options.
This development occurs amidst growing tensions between the Hipgnosis board and its investment advisor, Hipgnosis Song Management Limited (HSM).
Today, it was confirmed that Alchemy, operating under the name Concord, has secured a deal to acquire the business at £0.932 per share.
This represents a premium of approximately 32% over yesterday’s closing price of 71p, yet it is only a 4.3% premium to Hipgnosis’ adjusted net asset value per share, which stood at US$1.11 as of September 30, 2023.
· The Cash Consideration values the entire issued and to be issued ordinary share capital of Hipgnosis at approximately US$1,402.7 million.
· The Cash Consideration is equivalent to £0.932 per Share based on the Announcement Exchange Rate.
· The Cash Consideration represents a premium of approximately:
o 32.2 per cent. to the Closing Price of £0.71 on 17 April 2024 (being the Latest Practicable Date);
o 36.5 per cent. to the six-month volume weighted average price per Hipgnosis Share of £0.68 to 17 April 2024 (being the Latest Practicable Date); and
o 4.3 per cent. to Hipgnosis’ Adjusted 30 September 2023 Operative NAV per Hipgnosis Share of US$1.11.
Robert Naylor, chairman of Hipgnosis, stated: “This acquisition offers our shareholders a timely opportunity to realize their investment at a premium while addressing the challenges we foresee in significantly enhancing the share price.
Moreover, the board believes that Concord, a top global independent music company, is ideally suited to steward the Hipgnosis catalogue and uphold the interests of composers and performers.”
