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Concord bows out of bidding war with Blackstone for Hipgnosis

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May 9, 2024
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Illustration: Sarah Grillo/Axios

Concord will not raise its bid for Hipgnosis Songs Fund, ending a multiweek bidding war with Blackstone for the troubled U.K.-based music royalties company.

Why it matters: Blackstone is poised to end up with the catalog, while Hipgnosis shareholders will get to cash out with a sizable premium.

Driving the news: Concord confirmed Thursday morning that its most recent bid of $1.51 billion was its final offer.

  • Blackstone's most recent — and winning — offer came April 29 at $1.57 billion, or $1.30 per share.
  • Hipgnosis Song Fund, founded in 2018 by Merck Mercuriadis, includes the catalogs of Neil Young, Blondie, Shakira and the Red Hot Chili Peppers.

Catch up quick: Concord initially thought it had a deal to buy Hipgnosis in mid-April for $1.4 billion — or $1.16 per share. It would have been the music rights firm's largest acquisition.

  • A few days later, Blackstone topped that offer with a $1.5 billion bid.
  • Just days after that, Concord came back with its $1.51 billion offer, or $1.25 per share.

Context: Blackstone has a long history with Hipgnosis and Mercuriadis.

  • The PE giant backs a sister fund called Hipgnosis Songs Capital, which Mercuriadis also manages. Last year, Hipgnosis Songs Fund tried to sell roughly a fifth of its catalog to Hipgnosis Songs Capital for £363 million ($452 million in today's dollars), but investors voted it down.
  • Additionally, Blackstone and Mercuriadis co-own Hipgnosis Songs Management, the investment adviser to HSF. That relationship has come under heavy scrutiny by HSF's board in recent months.
  • HSM held a six-month option to buy the entire HSF catalog should the two terminate their investment advisory agreement.
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