Hipgnosis backs £1.3bn private equity takeover by Blackstone

Deal would end six years of turmoil for owner of back catalogues of star artists ranging from Blondie to Neil Young and Justin Bieber

The struggling owner of music back catalogues ranging from Shakira to the Red Hot Chili Peppers has agreed a $1.6bn (£1.3bn) improved takeover offer from the US private equity investor Blackstone.

Hipgnosis Songs Fund said it was recommending the offer, which trumped a $1.4bn bid by the US-based royalties fund Concord Music.

The takeover would mark the end of a turbulent six years for Hipgnosis as a listed company in London. The company was founded in 2018 by Merck Mercuriadis, the former manager of acts including Elton John, Iron Maiden, Guns N’ Roses and Beyoncé.

Mercuriadis used his music industry connections to spend millions on the rights to 138 catalogues with more than 40,000 songs, in the hope that they would provide a steady stream of income that would be attractive to investors.

However, the company ran into trouble because of rising interest rates and changes to the valuation of its songs. Investors voted in October against continuing the struggling fund in its then form, forcing it to review its options.

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