Hipgnosis threatens to sack adviser if discount does not narrow

In the circular published today in connection with Hipgnosis Songs Fund’s planned catalogue disposal, the board has introduced some surprise elements to the proposals:

• The board says that if the continuation vote is passed at the 2023 AGM, there will be another at an extraordinary general meeting in January 2026, again at the AGM to be held in 2028 and at every third AGM thereafter;
• Subject to the 2023 continuation resolution being passed, the investment advisory agreement will be terminable by the company on 12 months’ notice; and
• If the company’s share price stands at an average discount to the operative NAV, (based on the interim report for the period to 30 September 2024) of 10% or more, measured on average over the month of January 2025, the board intends to serve notice to terminate the investment advisory agreement. The board may withdraw the notice before the effective date of termination if it considers it to be in the interests of shareholders to do so.

Andrew Sutch has informed the board that he will step down as chair and retire as a director once a suitable replacement is found and, in any event, at or before the AGM in 2024. The company will now commence a process to recruit a new chair. In addition, Andrew Wilkinson has also informed the board that he intends to retire as a director before the end of 2023, thereby reducing the board to five directors. The board intends to appoint Cindy Rampersaud, who joined the board on 1 August 2023, to the role of chair of the Audit and Risk Management Committee upon Andrew Wilkinson’s retirement.

There is another bit of news that looks interesting. The price for the catalogues seemed a bit on the low side – calling into question the accuracy of the NAV by some commentators – now there is a ‘Go-Shop’ provision that allows other parties to bid for these assets at a higher price. The statement says “the board has recently confirmed that credible third parties are already engaged in this Go-Shop process.”

SONG : Hipgnosis threatens to sack adviser if discount does not narrow