Hipgnosis Songs Fund has introduced a last-second delay in publishing interim outcomes for the six months ended Sept. 30, citing considerations over its valuation following a collection of hiccups for the Merck Mercuriadis-led firm.
The fund, which owns full or partial rights to the track catalogs of artists starting from Justin Bieber, Neil Young, Bruno Mars, Jimmy Iovine, 50 Cent, Shakira, Blondie, Justin Timberlake, Lindsey Buckingham and plenty of extra, was scheduled to publish it monetary outcomes on Tuesday (Dec. 19) however now expects to announce on New Year’s Eve, based on a regulatory submitting.
In explaining the delay, the Hipgnosis board mentioned the valuation it acquired from an impartial agency was “materially higher than the valuation implied by proposed and recent transactions in the sector,” particularly two offers involving itself: a proposed $417.5 million sale of 29 catalogs to Blackstone-backed Hipgnosis Songs Capital, a worth reflecting a 24.3% low cost from a valuation dated March 31, and final week’s sale of 20,000 “non-core songs” to an undisclosed purchaser for $23.1 million, which it mentioned displays a 14.2% low cost on the songs’ valuation as of early fall.
Due to the disparity between the impartial valuation and the “implied” one tied to current developments and proposed gross sales, the board sought recommendation from its in-house funding advisor, Hipgnosis Song Management Limited, which delivered a “heavily caveated” opinion that led to the board’s considerations as to the valuation of HSF listed within the interim outcomes scheduled to be disclosed at this time.
Hipgnosis is comprised of three firms: Hipgnosis Song Management, Hipgnosis Songs Capital and Hipgnosis Songs Fund. The latter of the three has been mired in controversy in current months after it was introduced that the London-listed belief wouldn’t pay its buyers a dividend due to new, decrease projections for income. On Oct. 26, buyers of the fund overwhelmingly demanded structural adjustments to the music rights firm, with greater than 80% of Hipgnosis buyers voting in favor of the board drawing up “proposals for the reconstruction, reorganization or winding-up of the company to shareholders for their approval within six months.”
Last month the corporate introduced that the fund is not going to declare dividends earlier than the brand new fiscal yr, which begins subsequent April, with the intention to guarantee it has sufficient on its steadiness sheet to pay contractually-mandated catalog bonuses.
Investors are nonetheless processing the information, with the corporate’s inventory solely barely down, roughly 2%, in mid-day buying and selling on the London Stock Exchange.
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