Hipgnosis Songs Fund is raising more cash, via the placing of a new tranche of shares on the London Stock Exchange.
The company announced today (June 16) that it is targeting a raise of approximately GBP £150 million (USD $210 million) via the placing of 123.97 million ordinary shares at an issue price of £1.21 per share.
The money will be used to “to acquire a substantial pipeline of songs”, said Hipgnosis, including “some of the most influential and successful songs of all time”.
The placement opened today, and is expected to close on July 6 – although Hipgnosis reserves the right to close it earlier or later than this date.
Interestingly, Hipgnosis noted in today’s announcement that if stock market investors want in, they better not hang about. The firm said that, subsequent to the new placing, it “does not currently intend to offer further shares for cash consideration until after… 31 March 2022”.
However, Hipgnosis added: “Separate to the placing, [we are] currently considering a refinancing of [our] existing Revolving Credit Facility.”
In its preliminary results for the year ended March 2021, as released last week, Hipgnosis confirmed that its total gross indebtedness had reached USD $577 million (with net indebtedness of $438 million), following the draw-down of $90 million from its Revolving Credit Facility in March this year.
Hipgnosis last raised money via the stock exchange in February, when it generated USD $100 million via a new share issue. The money raised by that share issue was led by New York-based Morgan Stanley Investment Management Inc.
Speaking today about the new plan for the £150 million share issue, Hipgnosis founder and CEO, Merck Mercuriadis, said: “I founded Hipgnosis to give the investment community access to extraordinarily successful hit Songs by culturally important artists and to establish Songs as a new and uncorrelated asset class with attractive risk-adjusted returns.
“Three years after our IPO the support of our shareholders has allowed us to build a portfolio of songs with a value over $2.2 billion and Hipgnosis has delivered a Total NAV Return of 40.7% against the most challenging social and economic backdrop of our lives. This success has firmly established Songs globally as one of the most attractive new asset classes.
“This raise gives our public markets investors, historic and new, the only chance for the next 12 months to get access to Hipgnosis’ existing portfolio as well as a pipeline comprising some of the most important and successful songs of all time, at valuations that are highly attractive.”
Merck Mercuriadis, Hipgnosis (pictured)
“This raise gives our public markets investors, historic and new, the only chance for the next 12 months to get access to Hipgnosis’ existing portfolio as well as a pipeline comprising some of the most important and successful songs of all time, at valuations that are highly attractive considering the continued explosive growth of streaming that will magnify future revenues considerably.”
Hipgnosis has in the past month-and–a-half announced the acquisition of music catalogs from three Grammy-winning songwriters/producers: Joel Little (Taylor Swift, Lorde), Andy Wallace (Aerosmith, Coldplay, Prince), and Andrew Watt (Camila Cabello, DJ Snake).
The company is believed to have also recently acquired the Red Hot Chili Peppers’ song catalog for around $140 million.
Hipgnosis this week welcomed Vania Schlogel – Epidemic Sound‘s Chairwoman – to its board as a Non-exec Director.Music Business Worldwide