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Concord to buy Hipgnosis catalog for $1.4B

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Apr 18, 2024
Illustration of a pencil writing sheet music with dollar and cents symbols

Illustration: Sarah Grillo/Axios

Concord has agreed to buy Hipgnosis Songs Fund, the troubled U.K.-based music royalties company, for $1.4 billion in cash, the firms announced this morning.

Why it matters: The deal ends months of uncertainty regarding the future of one of the music catalog market's biggest players.

Zoom in: The deal is Concord's "largest acquisition in terms of total size," the company's CEO, Bob Valentine, tells Tim.

  • The offer of $1.16 per share represents a 32% premium over Wednesday's closing price.
  • Apollo, Concord's longtime backer, is helping fund the deal by providing debt capital and it will have an indirect minority interest in the acquiring entity.
  • The deal has already been unanimously recommended by Hipgnosis' board and nearly 30% of the company's shareholders have already pre-approved the deal, Valentine says.

What's next: The deal is expected to close in the third quarter.

Catch up quick: Hipgnosis, founded in 2018 by Merck Mercuriadis, spent billions on buying rights to catalogs from Barry Manilow, Blondie, the Red Hot Chili Peppers and Neil Young.

  • But last fall, after the company told investors that it would get far less of the royalty payments it was expecting, investors voted against continuing the fund.
  • Hipgnosis also launched a strategic review, though it said at the time that it was not considering a full sale of the company.
  • Investors also rejected a proposed deal to sell roughly a fifth of its catalog to Blackstone-backed sister fund Hipgnosis Songs Capital — also run by Mercuriadis — at a discount for £363 million.
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