In a further development to the recent offers by Concord Chorus Limited and Blackstone Europe for the assets of Hipgnosis’s (SONG) over the past week (discussed here, and here), Concord Chorus Limited has announced that it has reached agreement on the terms of an increased cash offer. This is at an increased price of US$1.25 (marginally higher than the Blackstone Europe proposal of US$1.24) for each scheme share for the entire issued and to be issued share capital of Hipgnosis, which has been unanimously recommended by the Hipgnosis board. This is an increase of roughly 7.8% on the original offer of US$1.16, and comes with no contingent consideration related to the manager waiving its exit fee.
The increased Concord offer represents a premium of:
- 42.6% to the closing price of £0.71 on 17 April 2024 (being the last business day prior to the commencement of the offer period);
- 47.3% to the six-month volume weighted average price per Hipgnosis share of £0.68 to 17 April 2024; and
- 12.4% to Hipgnosis’ adjusted 30 September 2023 operative NAV of $1.11.
The Hipgnosis directors believe that the increased Concord offer is in the best interests of Hipgnosis shareholders as a whole, and accordingly unanimously recommend that Hipgnosis Shareholders vote in favour of the resolutions required to implement the increased Concord offer to be proposed at the court meeting and the general meeting which are due to be held on or around 10 June 2024.
In response to the announcement, Blackstone Europe, released a statement strongly advising Hipgnosis shareholders to take no action and is considering its options. A further announcement will be made in due course.
[QD comment: This is great to see. When the dust settles, SONG shareholders should have a much better sense that they got a fair price than has been the case with previous uncontested bids in the sector. It reinforces our view that the Shot Tower NAV was overly pessimistic.]
SONG : Bidding war for Hipgnosis steps up a notch