- Hipgnosis shares rose 11% during early Monday afternoon.
- The firm owns the back catalogs of Blondie, Shakira and Dave Stewart.
Hipgnosis Songs Fund Shares took off on Monday after the music rights investor confirmed it had received a higher rival takeover offer.
Hipgnosis, owner of the back catalogs of Blondie, Shakira and Eurythmics co-founder Dave Stewart, last week agreed to a £1.1bn takeover approach by US rival Concord Music.
However, private equity giant Blackstone has tabled a $1.24 (£1) per share proposal that values the London-listed company at £1.2bn.
Atomic: Hipgnosis Songs Fund owns the back catalog of American rock band Blondie, whose lead singer is Debbie Harry (pictured)
Hipgnosis shares rose 11 per cent to 102p in early afternoon trading on Monday, making it the second-biggest gainer on the FTSE 250 index behind industrial equipment supplier Tyman.
It follows a challenging period for the company, which has had to deal with investor revolts, disputes with co-founder Merck Mercuriadis and a declining portfolio valuation.
According to Sky News, the offer was Blackstone’s fourth.and the above three are worth 82p per share, 88p and “marginally less” than Concord’s 93.2p per share.
After reviewing the latest deal with its financial advisor, Singer Capital Markets, Hipgnosis bosses said they were “willing to recommend” Blackstone’s offer to shareholders should the private equity firm declare a “firm intention to make an offer”.
But they still unanimously recommend the bid from Concord, whose parent company, Alchemy Copyrights, bought the Round Hill Music Royalty Fund last year for £375m.
Hipgnosis was co-founded in 2018 by Chic guitarist Nile Rodgers and Canadian Mercuriadis, who previously represented artists including Morrissey, Iron Maiden, Pet Shop Boys and Sir Elton John.
It has spent more than £2bn acquiring songs and catalogs from songwriters, from the Kaiser Chiefs to Neil Young, Mark Ronson and the Red Hot Chili Peppers.
The company earns royalties every time a song to which it owns the rights is played, but the value of its catalogs has declined over the past two years as rising interest rates have made other alternative asset classes, such as bonds , be more attractive.
Last year, Hipgnosis agreed to sell some of its catalogs to Blackstone to reduce debt and finance a share buyback.
However, at an extraordinary general meeting, Hipgnosis investors voted against both the sale and the continuation of the group as an investment fund.
More recently, Hipgnosis reduced the value of its portfolio by more than a quarter following a review of its assets by investment banking firm Shot Tower Capital.
Russ Mould, chief investment officer at AJ Bell, said Hipgnosis shareholders “will be keen to hear the final score on a stock market listing that has been more soap opera than Glyndebourne”.
