(Bloomberg) – Private equity firm Blackstone has made a new offer worth about $1.5 billion to buy Hypnosis Songs Fund, topping a bid made last week by music rights investment firm Concord.
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The company made an improved fourth offer on Saturday to acquire all of Hypnosis' issued and to-be-issued share capital for $1.24 per share in cash, the company said in a statement. The improved offer is about 7% higher than Concord's bid.
“Blackstone has requested that the Hypnosis Board of Directors, under the terms of the Fourth Proposal, recognize the significant increase in value to all shareholders over and above the $1.16 indicated in the Concord Proposal, and unanimously “We strongly encourage you to work with Blackstone to reach an agreement on the proposed offer and make a firm offer in an expedited manner,” Blackstone said.
Hypnosis said on Sunday that if the private equity firm announces a firm intention to make a takeover offer, its board intends to recommend Blackstone's offer and provide Blackstone with access to conduct due diligence. .
Sky News previously reported that Blackstone had made a preliminary offer to Hipgnosis, a London-listed music rights investment company whose catalog includes songs by Blondie, Red Hot Chili Peppers and Neil Young.
Sky said previous offers from Blackstone included bids of 82p and 88p a share, while rival Apollo Global Management-backed music rights investment firm Concord announced on Thursday This is lower than the announced bid of 93.2 pence per share. The proposed improvements from Blackstone, which is being advised by investment bank Jefferies, are worth about 100 pence per share.
Read more: Concord to acquire Hipgnosis in $1.4 billion song catalog deal
Hypnosis' shares have risen around 30% since Concord's takeover bid, closing at 91.9p on Friday, just below the purchase price.
“Blackstone has advised the Hypnosis Board of Directors that the full board recognizes that the value to all shareholders under the terms of the Fourth Offer is a significant increase over the $1.16 set forth in the Concord Offer. “We strongly encourage you to work with Blackstone to reach an agreement on the proposal recommended by the consensus and make a solid offer in an expedited manner,” Blackstone said.
Hypnosis' board of directors unanimously agreed to the agreement with Concord on Thursday, saying the stock price is unlikely to increase to reflect the company's performance because “there are a number of company-specific and specific market issues.” .
The company's board of directors continues to support Concord's proposal, given the lack of certainty that Blackstone will provide a firm commitment, the company announced on Sunday.
Read more: Hipgnosis Songs fund reduces asset value due to accounting error
The deal comes after a strategic review in March concluded that investment adviser Hypnosis Song Management's assets were worth significantly less than they reported last September. It brought an end to a period of turmoil. Blackstone owns a stake in HSM, and HSM is contracted to manage the fund's assets.
–With assistance from Simon Lee.
(Updated Hipgnosis statements starting in 4th paragraph)
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