Round Hill Music Royalty Fund Ltd (LSE:RHMP, OTC:RHILF) (RHM) has accepted a buyout offer worth US$469 million from Concord Bidco, a subsidiary of independent music rights giant Concord, a company update revealed on Friday.
Concord will now own the rights to hits like “All By Myself” by Eric Carman and “What A Wonderful World” by Louis Armstrong as well as music by the Back Street Boys and Celine Dion.
Shareholders will receive US$1.15 per share, representing a 67% premium to Thursday’s US$0.69 closing price, with investors set to receive the group’s quarterly and special dividend in addition to the purchase.
Robert Naylor, chairman of RHM said: "The Board is pleased to present this opportunity for liquidity at a premium to both the share price and the IPO price, as well as at a narrow discount to economic net asset value per share. The recommended offer represents excellent value for shareholders."
Rising by over 63% on the back of the news, shares in the group are now trading close to the offer price, at US$1.13.
Spending around US$300 million last year on the acquisition of music rights from Phil Collins and Genesis members and having already invested over US$2 billion into the music rights industry, Concord’s acquisition represents a good deal for them too, picking up the music rights at an 11.5% discount on the fund’s net asset value of US$1.30 per share.
“Concord has a global team of sync, licensing, marketing, copyright and royalty experts well positioned to maximise the value of this portfolio for all of the songwriters and artists within it,” Bob Valentine, chief executive officer at Concord said.
Investors will now decide on the deal in an upcoming meeting scheduled for within the month, with a 75% vote in favour required for the acquisition to be completed.