Hipgnosis Songs Fund Delays Finance Results Due to Catalogue Valuation Concerns

Hipgnosis Songs Fund Delays Financial Results Publication

The publicly listed music rights owning company, Hipgnosis Songs Fund, has postponed the release of its financial results for the six months ending on September 30th. Originally scheduled for publication today, the figures have been delayed due to concerns raised by the board regarding the valuation of the company’s catalogues.

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The board expressed in a statement this morning that the valuation provided by an independent valuer “is materially higher than the valuation implied by proposed and recent transactions in the sector”. This encompasses transactions proposed and executed by HSF itself.

Notably, HSF recently announced the sale of a catalogue containing 20,000 “non-core songs” for $23.1 million, which reflects a 14.2% discount to the valuation of these assets as of September 30, 2023. Additionally, a deal was negotiated to sell a set of more valuable rights to the separate Blackstone-backed Hipgnosis Songs Capital for $417.5 million, representing a discount of 24.3% to the valuation of these assets as of March 31, 2023.

Confronted with the implications of recent deals in the music rights space, the board sought advice from its investment adviser, Hipgnosis Song Management – a separate entity from Hipgnosis Songs Fund and majority-owned by funds managed and/or advised by Blackstone.

“Hipgnosis Song Management eventually provided an opinion,” the board continued, “which was heavily caveated, such that the board has concerns as to the valuation of the company’s assets in its interim results. The company expects to publish the interim results by December 31, 2023.”

Challenges Faced by Hipgnosis Songs Fund

The publicly listed Hipgnosis fund has faced a period of instability, with investors increasingly expressing criticism towards both the HSF board and HSM. The proposed sale of rights to Hipgnosis Songs Capital was intended to assuage investors by bolstering HSF’s share price. However, some shareholders were critical of the proposed deal between Hipgnosis entities.

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Ultimately, the transaction did not proceed after investors overwhelmingly voted against HSF’s continuation in its current form at a continuation vote in October. A strategic review is now underway to identify a path forward with the support of shareholders.

For more information about Hipgnosis Songs Fund, please visit their official website here.

To gain insights into Blackstone, the major entity involved in the valuation of assets, visit their website here.

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