Nashville-based Concord, an independent music company, has reached an agreement to acquire the embattled UK music rights investment fund, Hipgnosis Songs Fund, for €1.3 billion. The deal offers a significant premium to Hipgnosis shareholders and will give Concord control of a catalog featuring superstars like Shakira and Neil Young.
The acquisition comes after a tumultuous period for Hipgnosis. Founded by veteran music executive Merck Mercuriadis, the firm initially attracted investors with its promise of reliable royalty income. However, a combination of shareholder revolts, portfolio valuation concerns, and disputes with investment advisers amidst rising interest rates led to significant pressure for the company.
Focus Shifts to Investment Advisor
The spotlight now turns to Hipgnosis' investment adviser, HSM, a Blackstone-backed entity. HSM holds a call option allowing it to purchase the Hipgnosis portfolio if the investment advisory agreement is terminated. Industry experts are watching closely to see if HSM will exercise this option, potentially leading to a higher counter-offer. Merck Mercuriadis, who heads up HSM, has a strong industry reputation and may seek to retain the valuable portfolio.
The Future of Hipgnosis
The acquisition by Concord, which is backed by Apollo, has received the blessing of the Hipgnosis board but still requires shareholder approval. If successful, the deal will mark a major shift in the music rights landscape. Concord, which has been expanding its hold on music publishing, will gain significant additional assets.
