Analysts and a major investor say that the upcoming Hipgnosis Songs Fund Limited (LSE:SONG) shareholder meeting might echo the Ella Fitzgerald song We Can't Go on This Way.
Shareholder Asset Value Investors (AVI) is certainly playing the song at full blast, having penned an open letter to other investors about the proposed US$440 million asset sale.
It said "a reset is urgently required".
AVI, which has held a stake since 2020 and currently manages a 5% stake in SONG on behalf of institutional clients, said "not one" of many major shareholders it has spoken to is in favour of an immediate sale of the portfolio.
Having read the letter, broker Stifel said it "broadly agrees" with the contents of the letter, "as yesterday's news on the dividend withdrawal has changed the dynamic around the upcoming votes".
In the letter, AVI said it had contacted "a majority" of the share register and said it now believes that "many" will vote against continuation at the AGM and EGM on Thursday, 26 October.
"We urge undecided shareholders not to be swayed by a misleading narrative that a failure to pass the continuation resolution results in a wind up of the company or a fire sale of assets," the letter said.
"We are concerned that a dangerous misleading narrative has been allowed to develop as to what happens if the continuation resolution is not approved by shareholders."
AVI said it was optimistic about the company's assets benefiting from industry trends like streaming growth and systematic price increases, but added that "we strongly believe that a reset is urgently required", pointing to the greater returns enjoyed by shareholders of rival London-listed fund Round Hill Music Royalty Fund.
It said if continuation is not approved, the eventual outcome could see several options, including the fund continuing with the same manager but under different terms, continuing with a new manager, or exploring an asset sale at another time.
"Voting against continuation would provide a newly reconstituted board with a blank canvas to take on this task," it said.
Analysts at Stifel said their concern on how a board would interpret significant votes against continuation "now appears moot".
They added: "We think any incoming chairman would now recognise a vote against continuation and the first disposal as being a protest vote against the incumbents and the cleanest method to ensure shareholders regain control over the company and not an order to commence an immediate orderly sale of the portfolio."