Incremental increase in Blackstone offer for Hipgnosis Songs Fund

On 29 April 2024, the board of Hipgnosis Songs Fund Limited recommended that shareholders accept the $1.30 per share offer made by Blackstone Europe, via its wholly-owned investment subsidiary Lyra Bidco (click here to see our coverage of this). However, on 24 May 2024 it was announced that, with the consent of the Panel, there would be a short delay in the posting of the offer document in respect of the initial offer and that this would be posted by no later than 3 June 2024. The offer document has now been published and we would recommend shareholders read this in full and seek financial advice where necessary, before proceeding. However, the main emphasis of the announcement is that there has been a small increase in the offer price to US$1.31 per share and that the deal now has approval to proceed as a scheme of arrangement (under Part VIII of the Companies Law). SONG says that, in response to a briefing paper, the Competition and Markets Authority has confirmed in writing that it requires no further information on the acquisition at this stage.

Revised offer price

Under the terms of the revised offer, Hipgnosis shareholders will be entitled to receive US$1.31 in cash per Hipgnosis share which, based on the announcement exchange rate, is 105 pence per share in sterling. This represents a premium of approximately:

• 49.2% to the closing price of 71 pence per Hipgnosis share on 17 April 2024 (being the last business day before the commencement of the offer period);
• 54.8% to the volume-weighted average price of 68 pence per Hipgnosis share for the one-month period ended 17 April 2024 (being the last business day before the commencement of the offer period); and
• 59.3% to the volume-weighted average price of 66 pence per Hipgnosis share for the three-month period ended 17 April 2024 (being the last business day before the commencement of the offer period).

The revised offer values Hipgnosis’ entire issued, and to be issued, ordinary share capital at approximately US$1,584m (which is equivalent to £1,272m based on the announcement exchange rate).

The announcement says that the increase of US$0.01 per Hipgnosis share from the acquisition price to the revised offer price has come about as a result of discussions between the Hipgnosis Board, Bidco Board and their respective advisers and in part reflects Hipgnosis incurring lower adviser fees in respect of the transaction than previously expected. Shareholders will be able to elect (subject to the terms and conditions of the facility) to receive sterling (after deduction of any transaction or dealing costs associated with the conversion) at the applicable market exchange rate.