Hipgnosis accepted a US$1.4 billion buyout offer
Hipgnosis, the company once led by Canadian Merck Mercuriadis that bought up a couple billion dollars’ worth of song catalogues, has been sold. After running into financial underperformance issues and some internal turmoil, it was clear the company needed a lifelift. They got it from Concord Chorus in an all-cash deal. Concord is getting help from a fund called Apollo.
The company’s portfolio includes Justin Bieber, Justin Timberlake, Leonard Cohen, Red Hot Chili Peppers, Journey, Neil Young, Blondie, Chrissie Hynde, Barry Manilow, Bob Rock, Chris Cornell, Jack Antonoff, Jimmy Iovine and dozens of others.
The US$1.4 billion deal represents a 32% premium on Hipgnosis’ share price of US$1.16 on the London Stock Exchange.
Concord was a fierce rival who is bulking up again (they bought the Round Hill Royalty Fund last year) administers about a million copyrighted songs ranging from Phil Collins to Leonard Bernstein.
I talked to Merck about his business last year and raised the issue of the possibility of higher interest rates making things difficult for him. When rates went up, investment money started going places with higher returns. The money company back from Hipgnosis wasn’t enough for them, leading to the company’s financial crisis.
The biggest players in this space are now Concord and Primary Wave, both companies with a lot of experience in music publishing. Still, it looks like the gold rush for music publishing is over.
I have a feeling that there will be some backlash about all this as artists see their songs sold again–and to a company that didn’t make the original deal. Let’s see where it goes.
