That long-anticipated, potentially nail-bitingly close shareholder vote on whether music-rights buyer Hipgnosis Songs Fund should continue as it was? It turned out to be not so close after all.
83.2% of the company’s shareholders voted against ‘continuation’ yesterday, while also rejecting plans to sell $440m of its catalogues to sister fund Hipgnosis Songs Capital.
Oh, and they also ejected the fund’s chair Andrew Sutch with immediate effect, despite his plan to resign next year.
What happens now? The Hipgnosis Songs Fund board will now put forward “proposals for the reconstruction, reorganisation or winding up of the Company” within the next six months.
“While shareholders have not supported our proposed transaction or the continuation vote, it is clear that they share our belief in the inherent quality and potential of these assets,” said senior independent director Sylvia Coleman.
That view was mirrored by founder Merck Mercuriadis. “Our conversations with shareholders have revealed a consensus that they are enthusiastic about the quality of the Company’s iconic portfolio of songs, however it is also clear that they are asking for change and we respect that feedback,” he said in a separate statement.
The challenge for Hipgnosis is that while its shareholders may share its belief in the value of music rights, it has a lot of work to do to convince them to share its belief that it’s the right company – at least in its current form – to make the most of that value.