US private equity giant in £1.3bn swoop for troubled music fund Hipgnosis

Hipgnosis has backed a £1.3billion offer from US private equity in the latest leg of a drawn out bidding war for the beleaguered music fund.

As the City is gripped by a wave of takeover activity, the FTSE 250 group accepted a 104p a share bid from Blackstone.

That was more than the 99p a share Blackstone proposed last week and eclipsed two rival offers from US music fund Concord.

Hipgnosis, which owns the rights to music catalogues from the likes of Beyonce and Blondie, looks set to fall into private equity hands – unless Concord or another bidder comes back with an improved offer.

Hipgnosis – founded by Merck Mercuriadis and Chic funk guitarist Nile Rodgers – is just the latest London-listed company to be targeted by a foreign buyer.

Hipgnosis – founded by Merck Mercuriadis and Chic funk guitarist Nile Rodgers (pictured) – is  the latest London-listed company to be targeted by a foreign buyer.

Cyber-security group Darktrace backed a £4.25billion takeover by US private equity firm Thoma Bravo last week, Australian mining giant BHP is in talks to buy Anglo American and Czech billionaire Daniel Kretinsky is eying Royal Mail owner International Distributions Services.

A host of others have also agreed to be bought, including FTSE 100 packaging group DS Smith, haulier Wincanton and builder Redrow – meaning they will leave the UK stock market.

The exodus – at a time when of very few companies are listing their shares in London – has sparked fears over the health of the stock market and the City.

‘There will be fresh hand-wringing in the City about the extent of the exodus from London,’ said Susannah Streeter, an analyst at broker Hargreaves Lansdown.

But she added that Blackstone’s offer would be ‘music to the ears for shareholders’.

The stock has risen more than 80 per cent since early March but remains some 20 per cent below the peak in late 2021. 

Analysts at Liberum said: ‘We believe the Blackstone offer represents an attractive one for shareholders and should bring to an end what has been largely a painful saga.’

Takeover talk for Hipgnosis kicked off earlier this month when Nashville-based Concord, which is being backed by private equity firm Apollo, offered 93p per share for Hipgnosis – valuing it at around £1billion. 

Concord later hiked this offer to around £1.2billion following interest from Blackstone. The latest push by Blackstone puts it in pole position.

Qasim Abbas, senior managing director of Blackstone, said: ‘The offer is the result of extensive discussion and negotiations with the [Hipgnosis] board and provides shareholders the certainty of cash today.’

Concord will decide whether to raise its offer or walk away. Hipgnosis shares edged up 0.4 per cent.

This post first appeared on Dailymail.co.uk