Hipgnosis, which owns the rights to songs by Justin Bieber and Neil Young, helped kick-start a rush on catalog sales. But its future has been in doubt.
Hipgnosis Songs Fund, the British company that helped kick-start the music industry’s rush for catalog deals — acquiring tens of thousands of songs by Justin Bieber, Neil Young, Shakira and others — but has seen its share price plummet, has reached a tentative deal to sell itself to Concord, a major independent music company, for $1.4 billion.
Hipgnosis, which trades on the London Stock Exchange, said on Thursday that its board had given unanimous approval. But the deal still faces what could be a significant hurdle in the form of a contractual option held by an affiliated company to buy the catalog at a set price.
Robert Naylor, the chairman of Hipgnosis, said in a statement: “The acquisition represents an attractive opportunity for our shareholders to immediately realize their holding at a premium, mitigating the risks we see ahead to achieving a material improvement in the share price.”
Bob Valentine, the chief executive of Concord, which has a portfolio of labels like Stax and Craft, and large holdings in music publishing, added: “We believe we can integrate Hipgnosis’ catalogs into our wider portfolio of 1.2 million songs in a way that will deliver benefits for composers, performers and all our stakeholders.”
Concord’s cash offer, of $1.16 per share, represents a 32 percent premium over Hipgnosis’s last closing share price, though it is still down almost 28 percent from the stock’s peak in November 2021.
The Concord acquisition, if it goes through, would end one of the most tumultuous stories in the recent history of the music business. Hipgnosis, founded by Merck Mercuriadis, a longtime music executive who once managed superstar acts like Beyoncé, Guns N’ Roses and Elton John, went public in 2018, with a splashy pitch to investors — and artists — that the royalties from the copyrights of popular songs could be “more valuable than gold or oil.”
