Photo Credit: Atwena Goodman
Concord refused to up its Hipgnosis acquisition offer from $1.25 per share—now the music group has officially withdrawn its offer entirely after being outbid by Blackstone.
Blackstone’s $1.57 billion bid is a premium of 4% over Concord’s offer of $1.51 billion made via Concord Bidco. Concord raised its bid from $1.40 billion once in an attempt to outbid Blackstone, though an emerging bidding war quickly ended. Blackstone has around $1 trillion in assets under management across sectors including real estate, public debit and equity, and life sciences.
Blackstone is a majority owner of Hipgnosis Songs Management, while the bid for Hipgnosis Songs Fund was made via Blackstone’s newly formed ‘Lyra Bidco.’ The proposal values HSF at $1.30 per share and was recommended by the fund to its shareholders. As part of the deal, Blackstone would assume HSF’s sizable debt facility.
“The Board is pleased to unanimously recommend this $1.6B offer for Hipgnosis from Blackstone,” HSF Robert Naylor said in a statement last month. “Since we started our strategic review, we have been clearly focused on looking at all options to deliver shareholder value. We are delighted that, following competitive interests in acquiring Hipgnosis, our investors now have a chance to immediately realize their holding at an increased premium.”
Concord’s statement today about their withdrawal says, “This announcement confirms that Hipgnosis has provided its consent to the Panel on Takeovers and Mergers to release Bidco from its obligations under the City Code on Takeovers and Mergers to proceed with the proposed offer. Accordingly, Bidco confirms that it will no longer proceed with the offer.”
So far, Concord has not disclosed its reasoning behind withdrawing its offer. The original final offer contained a clause that said if it did win the acquisition battle, it would resell around 30% of the HSF catalog within 24 months after it is acquired.
Meanwhile, Blackstone says it plans to “further develop the potential of Hipgnosis’ portfolio” following the acquisition. That may include a restructure of the Hipgnosis Songs Group LLC within six to nine months after acquiring HSF. HSF is comprised of a portfolio of 138 catalogs containing rights to over 40,000 songs.
