The falling share price of Hipgnosis Songs Fund has been a concern for the company for some time, not least because it has been a block on its ability to raise more money to buy more music catalogues.
Could selling some of its existing catalogues be the key? That’s what Hipgnosis is hoping, with a deal that it sees as “a catalyst for a re-rating of the Company’s share price”.
The deal involves selling 29 of its catalogues to… Hipgnosis Songs Capital. Yes, that’s the other Hipgnosis fund, the one backed by private-equity firm Blackstone.
Founder Merck Mercuriadis described this as a way to raise money that will enable Hipgnosis Songs Fund to “reduce debt and ‘buy back’ shares in the market” – two measures that the company says shareholders were keen for it to do.
Keeping those shareholders happy is vital for Hipgnosis, because next month at its AGM, they’ll be voting on whether it should continue trading as a public company.
The full details are in Hipgnosis’s announcement, including a ‘Go-Shop’ provision that means a 40-day window for alternative offers to be made for the 29 catalogues being sold.