Blackstone tops Concord's bid for Shakira music owner Hipgnosis

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[April 22, 2024]  (Reuters) -Blackstone made a potential offer to buy Hipgnosis Songs Fund for about $1.5 billion, outbidding Apollo-backed Concord and triggering a takeover battle for the owner of music rights by artists including Shakira and Red Hot Chili Peppers.   

Shakira speaks after receiving the Video Vanguard Award from Wyclef Jean during the 2023 MTV Video Music Awards at the Prudential Center in Newark, New Jersey, U.S., September 12, 2023. REUTERS/Brendan Mcdermid/File Photo

Hipgnosis shares rose 10% to 1.01 pounds ($1.25) in early trade, their highest level since September 2022. Blackstone's fourth and latest proposal valued Hipgnosis at $1.24 per share in cash, higher than Concord's $1.16 a share bid.

Music rights investment firm Hipgnosis said on Monday it would recommend a higher Blackstone bid if the world's largest private equity firm were to table a formal offer.

Blackstone is a majority owner of Hipgnosis Songs Management (HSM), the fund's investment adviser, which holds a call option to purchase Hipgnosis' portfolio of songs if their investment advisory agreement was terminated.

Hipgnosis Songs Capital (HSC), a partnership between HSM and Blackstone, owns rights to music by Justin Bieber, Nelly Furtado and Justin Timberlake, among others.

Hipgnosis had last week agreed to the $1.4 billion deal with Concord.

"The Board and its advisers will continue to provide Blackstone and its advisers access to confirmatory due diligence, to enable Blackstone to announce a firm intention to make an offer, as soon as possible," Hipgnosis said.

Hipgnosis Songs Fund, founded by industry veteran and former CEO Merck Mercuriadis, launched a strategic review last year after a shareholder revolt threw its future into doubt.

The London-listed firm has since been in dispute with HSM, which is chaired by Mercuriadis, over the call option.

Shareholders in October had rejected the fund's proposed $440 million deal to sell 29 catalogues to HSC on valuation concerns.

($1 = 0.8076 pounds)

(Reporting by Prerna Bedi and Yadarisa Shabong in Bengaluru; Editing by Sherry Jacob-Phillips)

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