Yesterday (April 20), MBW advised you that Blackstone had submitted a proposal with a view to buying Hipgnosis Songs Fund (HSF) for roughly USD $1.50 billion.
That proposal was not – simply as MBW reported and Blackstone made clear – a “agency provide”… but.
Earlier than issuing a “agency provide”, Blackstone is ready on the response from the board of UK-listed HSF. At the moment (April 21) that response has arrived.
In an announcement despatched to MBW right this moment, HSF’s board has confirmed that, previously 24 hours, it obtained an “improved proposal” from Blackstone to amass the share capital of Hipgnosis Songs Fund.
The HSF board assertion continued: “The Board, having reviewed the Proposal with its monetary adviser, Singer Capital Markets, has indicated to Blackstone that the Proposal is at a worth that it could be minded to advocate to its shareholders ought to Blackstone announce a agency intention to make a proposal [on] such monetary phrases.”
Blackstone’s proposal challenges a earlier bid for Hipgnosis Songs Fund by Harmony – through Harmony Refrain – at a value of $1.402 billion (with a possible up-to-$25 million further bonus).
Simply over 23% of HSF’s shareholders have already made an “irrevocable” dedication to simply accept Harmony’s provide – leaving round 77% of HSF’s shareholders but to formally make up their thoughts.
In its new assertion RE: Blackstone right this moment, HSF’s board mentioned: “The Board and its advisers will proceed to offer Blackstone and its advisers entry to confirmatory due diligence, to allow Blackstone to announce a agency intention to make a proposal, as quickly as doable.
“There could be no certainty {that a} agency provide shall be made for the Firm by Blackstone, nor as to the phrases of any such provide. Accordingly, shareholders are suggested to take no motion right now with regard to the method by Blackstone.
“The Hipgnosis Administrators proceed to advocate unanimously to Hipgnosis shareholders the money provide by Harmony Refrain Restricted, an entity not directly managed by Alchemy Copyrights LLC. That suggestion has not been withdrawn, certified or modified.”
In its announcement of its $1.5 billion proposal yesterday, Blackstone made reference to Hipgnosis Tune Administration – the funding adviser of HSF, and a agency co-owned by Blackstone and Merck Mercuriadis.
HSM has a ‘name choice’ in its settlement with HSF that would offer HSM with the assured alternative to amass HSF’s portfolio beneath numerous set circumstances, ought to HSM ever be fired as HSF’s funding adviser.
Some observers have questioned whether or not HSF’s board might legally take a look at this ‘name choice’, significantly in gentle of a latest report on HSF’s accounting by Shot Tower Capital, which made numerous criticisms of HSM’s practices.
Blackstone, nonetheless, has made clear that it has religion within the authorized solidity of HSM’s ‘name choice’, ought to it ever must lean on it.
Stated Blackstone yesterday: “Blackstone and its portfolio firm HSM, having taken in depth authorized recommendation, stay assured within the enforceability of the Choice.
“Blackstone is looking for to discover a constructive final result for all shareholders at a good and affordable worth; nonetheless, Blackstone and HSM worth the contractual protections beneath the IAA and can vigorously defend HSM’s rights pursuant to the Choice if required to take action.”Music Enterprise Worldwide
