Music investor Hipgnosis Songs Fund to sell some of its catalogue, including songs by the pop star Shakira and rapper Nelly, for US$465 million to a private Blackstone fund to finance a buyback of Actionsrepay debt and strengthen its share price, the British company reported on Thursday.
The sale includes a portfolio of 29 music catalogs and a collection of non-core songs to a partnership between its investment adviser and funds advised by US private equity group Blackstone, Hipgnosis said on Thursday.
Shares of the company, which also owns the rights to songs by Red Hot Chili Peppers, Neil Young and Blondie, rose one 6.5% to a near one-year high of 99p in morning trade.
The company said in July, along with annual results, that it was studying a “strategic sale of song catalogs” to reduce the considerable discount of its share price to its net asset value.
Its founder, Merck Mercuriadis, is CEO and founder of investment advisor Hipgnosis Song Management (HSM), and owns a minority stake in the buyer, Hipgnosis Songs Capital.
In 2021, Blackstone Inc agreed to deploy around $1 billion in partnership with HSM to buy music rights and record songs at a time when online streaming was gaining popularity and becoming more lucrative.
Hipgnosis said the proceeds from the sale will be used, among other things, for a share buyback program of up to US$ 180 million and the repayment of a revolving line of credit of US$ 250 million.
The 29 catalogs represented the 19% of the company’s portfolio by value as of March 31. Hipgnosis Songs Fund will retain ownership of seven of its ten largest catalogues, he added.
Source: Reuters
Source: Gestion
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