Now that Hipgnosis Songs Fund agreed to a $1.4 billion sale to music publisher Concord on Thursday morning, a new and potentially final chapter has begun in the song management company's turbulent history.
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The deal with Nashville-based Concord, which last year bought Round Hill Music Royalty Fund for $468 million, is something of a warning sign for a company whose founder, Merck Mercuriadis, had promised to transform the music publishing industry and rebuild it in its image.
But the dream may not be over yet, as Mercuriadis can still exercise his controversial call option. This gives Hipgnosis Song Management, HSF’s investment advisor led by Mercuriadis (until he stepped down in February) and investment firm Blackstone, the right to buy HSF’s portfolio if their contracts are ever terminated.
HSF investors backed a “bung offer” to circumvent the call option, which offered third-party bidders up to a £20 million buyer’s fee. It is not yet known how much of this buyer’s fee Concord received, and it is still possible that HSM will exercise the call option. We will know soon enough whether Blackstone is prepared to pay to keep HSF or whether the bung offer worked as intended.
