JPMorgan Chase – Hipgnosis raises another $100m… led by Morgan Stanley money
Hipgnosis Songs Fund has just boosted its acquisition war-chest with another $100 million via a share issue.
MBW understands that New York-based Morgan Stanley Investment Management Inc. led the investment round, with the remainder of the raise coming from existing Hipgnosis shareholders.
This is significant, as it means that not only does Hipgnosis have access to Morgan Stanley money, but that UK-listed Hipgnosis has also, for the first time, welcomed a US-based institutional investor into its business.
Hipgnosis recently published a prospectus that could see the company raise up to $2 billion-plus via a series of new share issues over the course of 2020.
Today’s issue saw Hipgnosis raise £75 million (around $103 million) via the sale of 61.983m new ordinary shares.
Hipgnosis announced today’s news to the markets complete with a notably triumphant quote from the company’s founder, Merck Mercuriadis.
It’s fair to assume that Mercuriadis – who’s faced a touch of heat in financial pages from the likes of Warner Music Group CEO Steve Cooper in recent weeks – is directing his words both towards his shareholders, but also his doubters.
Said Mercuriadis: “2020 was a transformational year for Hipgnosis. Against one of the most challenging economic backdrops of our lives, we raised more capital than any other listed investment fund, outperformed the FTSE 250 index by 21.5% and paid a fully covered dividend of over 5 pence per share, which places us as the 35th highest dividend yielding company on the FTSE 250.
“Whilst we would not have wished for a pandemic to prove our thesis that music is a highly investable asset class generating uncorrelated returns, it has done exactly that. In just over two years from IPO to our latest results announcement as at 30 September 2020, we have generated a Total NAV Return of 37.9% for our shareholders, a 40.4% outperformance of the FTSE 250 over the same period.”
“2020 was a transformational year for Hipgnosis. Against one of the most challenging economic backdrops of our lives, we raised more capital than any other listed investment fund, outperformed the FTSE 250 index by 21.5% and [became] the 35th highest dividend-yielding company on the FTSE 250.”
Merck Mercuriadis, Hipgnosis
Mercuriadis said that Hipgnosis’ “momentum continues” in 2021, with his company “off to our strongest start ever, with some of the most important catalogue acquisitions we have made to date being announced”.
He added: “The new prospectus underpins our plans for marketing into new audiences and fundraising for the rest of the year and I’m delighted with the excellent first step we have made with a successful raise of over USD$100 million.
“Once again, I am incredibly appreciative of the support from both our existing and new shareholders and equally the incredible songwriters who have entrusted us with their iconic songs. We look forward to investing further into our pipeline of proven and culturally important songs and actively managing these incredible songs to enhance their legacy and maximise income as we seek to provide exceptional risk adjusted returns for shareholders.
“To top it off we have both the Number 1 and Number 2 airplay songs in the UK this week with Miley Cyrus featuring Dua Lipa and Justin Bieber respectively, both written by our songwriter Stefan Johnson.”
“We look forward to investing further into our pipeline of proven and culturally important songs and actively managing these incredible songs to enhance their legacy and maximise income as we seek to provide exceptional risk adjusted returns for shareholders.”
Merck Mercuriadis, Hipgnosis
in January, Hipgnosis secured a further $200 million to buy copyrights via a credit facility extension, with JPMorgan Chase Bank as Lead Arranger.
Speaking of last month, it was a particularly big one for Merck Mercuriadis’s company.
On January 6, Hipgnosis announced the acquisition of 50% of Neil Young’s song catalog, thought to be for a price around $150m.
In the same month, Hipgnosis also announced the acquisition of Jimmy Iovine’s production royalties, as well as 100% of Lindsey Buckingham’s publishing catalog, plus 145 Shakira songs including hits like She Wolf and Hips Don’t Lie.
And on January 21, Hipgnosis announced the acquisition of Bob Rock’s producer rights for hit recordings by artists such as Michael Bublé and Metallica.Music Business Worldwide