Hipgnosis Song Fund, which owns the rights to songs by famous artists, has postponed sharing its financial outcomes due to concerns that songs are being undervalued. The music fund was set up and launched by Chic legend Nile Rodgers and Merck Mercuriadis, former manager of acts including Elton John and Beyonce, and was set to share its half-year results on December 19. However, it has been confirmed that it will be delaying the release of the results due to concerns that music catalogues and songs are not being valued high enough amid sales.
According to NME, the UK firm decided to sell just under 30 music catalogues to the sister fund, supported by investment giant Blackstone in September this year. The deal valued the assets at about $418 million, however, this number was down by nearly a quarter compared to the results given back in March.
It came as the company confirmed it did not receive any better offers as interested parties “could not justify” a higher price, and sold 20,000 “non-core” songs for about $23 million, a nearly a 15 per cent discount on a September valuation.
Amid the potential sale, Hipgnosis – which spent $1billion acquiring artists’ back catalogues in 2021 – said that the prices received from an independent valuer is “materially higher than the valuation implied by proposed and recent transactions in the sector”.
A spokesperson for Hipgnosis said that the company has sought advice from its investment adviser, Hipgnosis Songs Management, which gave the board “concerns as to the valuation of the company’s assets in its interim results.”
It was also reported that the fund released a strategic review two months ago, which could potentially lead to the replacement of founder and chief executive Mercuriadis. The half-year results are now expected to be posted by December 31.
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