LONDON — Shareholders of the Hipgnosis Songs Fund have voted overwhelmingly to pass a special resolution authorizing the payment of up to 20 million pounds ($25 million) to prospective bidders seeking to acquire the fund's assets.
The special resolution was approved by 99.9% of the fund's shareholders at an extraordinary general meeting held in London on Wednesday (7 February), according to a regulatory filing.
It gives the board of Hipgnosis Songs Fund (HSF) the power to pay a fee of up to £20 million to any prospective bidder or bidders who make a “good faith” bid or offer to acquire one or more of the company's subsidiaries that they own musical assets. , and/or some of the fund's music rights on favorable terms. The fee is intended to reduce the risk of bidding on the Hipgnosis Songs Fund music catalogs by providing “significant protection” against due diligence and acquisition costs.
In his statement, Robert Naylorchairman of Hipgnosis Songs Fund, thanked shareholders “for their continued support” and said the company's board “remains focused” on its strategic review, “under which it is considering all options to deliver shareholder value.”
The London-listed fund, which owns full or partial rights to the song catalogs of artists including Justin Bieber, Neil Young, Bruno Mars, Jimmy Iovine, 50 Cent, Shakira, Blondie, Justin Timberlake, Lindsey Buckingham and many more , hopes the lure of a large fee will help attract potential bidders.
In October, shareholders voted down the music rights fund's proposed $440 million deal to sell 29 catalogs to Hipgnosis Songs Capital — a partnership between investment giant Blackstone and the fund's investment adviser Hipgnosis Song Management — citing lack of “informed”. assessment.
October's annual shareholder meeting also saw a majority of investors vote down a resolution “to continue operating the fund in its current form” – a so-called “continuation vote” – starting a six-month countdown for the board to come up with plan “for the reconstruction, reorganization or liquidation of the company”.
This led to the installation of a new executive board to replace Naylor Andrew Sutch as president in November.
Last year ended with Hipgnosis reducing the value of its music portfolio after what Naylor described to investors as a strained relationship with its investment adviser. Merck Mercuriadis-Head of Hipgnosis Song Management (HSM), above catalog value.
This year has so far started on an equally rocky footing with the fund's board questioning HSM's ability to bid competitively for its assets.
A major sticking point is the investment adviser's call right, which gives it the right to buy the company's portfolio if its contract with the fund is terminated with less than 12 months' notice, among other scenarios. The fund's board argues that Hipgnosis Song Management's call option hurts its ability to receive competitive bids.
Last week, Mercouriadis announced that he would step down as CEO of Hipgnosis Song Management to take up a newly created role as chairman with Ben Katowsky replacing him as CEO.
Hipgnosis Songs Fund's share price was roughly flat at 65 British pence ($0.84) after Wednesday's extraordinary general meeting.
from our partners at https://www.billboard.com/business/business-news/hipgnosis-25-million-fee-prospective-catalog-buyers-approved-1235601675/