Liberum believes Blackstone's $1.24 per share proposal to acquire Hipgnosis Songs Fund “presents materially better value to shareholders than the Concord offer” and expects the higher bid to “ultimately be the successful one”.
Blackstone's interest in Hipgnosis is part of a broader strategy involving its existing 51% stake in Hipgnosis Song Management, Liberum pointed out.
But Liberum analysts left the door open to further complexities in the bidding war should Concord raise its bid to counter Blackstone’s.
Hipgnosis Songs Fund, managed by Hipgnosis Song Management, is involved in acquiring and managing song rights, with a portfolio including tracks from Neil Young, Red Hot Chili Peppers, Mark Ronson and Blondie.
The fund has significantly underperformed since going public in 2018 and the value of the acquired music rights has been consistently written down.
Yet Libereum pointed out that Blackstone’s proposal means the private equity firm still sees value in the portfolio.
“A big unknown has been cleared up over the weekend in that there is no doubt that Blackstone is significantly interested in these assets,” said the broker.
“The call option and the potential for a bid from either Blackstone directly or via HSM was mute unless Blackstone was interested enough in the assets to provide the financial backing.”