By Christian Moess Laursen
Hipgnosis Songs Fund said Tuesday that its request to have the call option removed from its investment advisory agreement was declined by Blackstone-backed investment adviser Hipgnosis Songs Management.
The call option gives the adviser the right to buy the portfolio at a certain time and price. The proposal to have it removed is to ensure potential buyers aren’t deterred from bidding and was “in the best interest of shareholders as a whole,” Hipgnosis Songs Fund said.
Hipgnosis Songs Management didn’t immediately respond to a request for comment.
Hipgnosis Songs Fund, a London-listed song catalog fund that owns rights to tracks by Shakira, the Red Hot Chili Peppers and others, said its recently formed board is continuing its strategic review and looking at all options for the future of the company.
In October, shareholders voted against a sale of 29 music catalogues for a cash consideration of $440 million to Hipgnosis Songs Capital. HSC is also majority-owned by funds managed or advised by Blackstone.
The board said on Tuesday that it is investigating whether the 29 catalogues proposed to be sold are growing at materially higher rates to the overall portfolio and therefore were cherry-picked for sale to HSC, following statements made by two independent research reports.
If so, the board will look into whether this was properly disclosed to the previous board and if the previous board were provided with the relevant information to enable a decision in the best interest of shareholders.
At 0919 GMT, Hipgnosis Songs Fund shares were down 0.3% at 72.00 pence.
Write to Christian Moess Laursen at [email protected]
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