© Reuters. FILE PHOTO: A headset is seen in front of displayed Hipgnosis logo in this illustration taken June 28, 2021. REUTERS/Dado Ruvic/File Photo
(Reuters) -Hipgnosis Songs Fund’s (HSF) shareholders backed a board proposal on Wednesday to pay a fee of up to 20 million pounds ($25 million) to suitors to make bidding for its music assets more appealing in the light of a call option held by its investment adviser.
At an extraordinary general meeting, 99.9% of shareholders of the fund, which holds the rights to the work of artists ranging from Shakira to Neil Young, voted for the special resolution.
The adviser, Hipgnosis Songs Management (HSM), is run by the fund’s founder Merck Mercuriadis and backed by private equity firm Blackstone (NYSE:). The call option gives it the right to purchase the fund’s music portfolio if and when its agreement with the fund is terminated.
Relations between HSM and HSF have become strained in recent months after HSF shareholders revolted against a $440 million catalogue sale deal, which forced a revamp of the fund’s board and a strategic review.
A key point of contention has been HSM refusing to drop the call option from its advisory agreement that allows it to bid for HSF’s portfolio.
“The board remains focused on the strategic review, under which it is looking at all options to deliver shareholder value,” said Chairman Robert Naylor, who joined the board in November from recently acquired Round Hill Music after several board members resigned following the shareholder revolt.
($1 = 0.7920 pounds)
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