The music industry has not seen such a competitive move for music rights in a long time, with Blackstone Group taking advantage of the opportunity and paying USD 1.57 billion for Hipgnosis Songs, beating out offers from Concord, Shakira and Red Hot Chili Band. Blackstone’s firm’s offer on Hipgnosis is USD 1.30 per share while Concord values the company at USD 1.25 per share. This leads to Blackstone’s bidding on Concord.
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Blackstone Expands Music Rights Portfolio
The acquisition will strengthen Blackstone’s music rights portfolio with over 65,000 songs, including tracks from iconic artists such as Blondie and Neil Young. This addition complements Blackstone’s existing catalogue, which already includes songs from notable celebrities such as Justin Bieber and Justin Timberlake. Blackstone’s investment in the American performance rights organization SESAC further strengthens its presence in the music industry, with partners such as Bob Dylan and Adele.
Blackstone’s Independent Proposal
Blackstone’s improved offer on Monday, despite Concord’s earlier offer, shows Blackstone is resolved to acquire Hipgnosis. Blackstone is the majority owner of Hipgnosis’ investment advisor, HSM, and holds a call option that would allow Blackstone to offer Hipgnosis a higher bid for its portfolio if HSM were to terminate its advisory agreement with Hipgnosis. What’s important about this proposal is that it’s not tied to HSM.
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Hipgnosis Chairman Robert Naylor expressed satisfaction at the increased premium offered by Blackstone, allowing investors to quickly acquire their stake amid competing interests in acquiring the company.
Background and Strategic Review
It was founded in 2018 by music industry veteran Mark Mercuridis, Hipgnosis which launched a strategic review last year that brought a shareholder challenge and a controversy with the HSI out-calling option. The fund’s decision to restructure followed a volatile period for it, which required rethinking its strategy and amending its management structure.
