TIDMSONG
RNS Number : 5083Z
Hipgnosis Songs Fund Limited
21 September 2020
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR
INDIRECTLY, IN OR TO THE UNITED STATES, AUSTRALIA, CANADA, THE
REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA OR
ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR
RELEASE OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL. PLEASE SEE THE
SECTION ENTITLED "IMPORTANT NOTE" TOWARDS THE OF THIS
ANNOUNCEMENT.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 ("MAR").
21 September 2020
Hipgnosis Songs Fund Limited ("Hipgnosis" or the "Company")
Proposed Placing to raise up to GBP250 million
The Board of Hipgnosis, the first and only UK investment company
offering investors a pure-play exposure to songs and associated
musical intellectual property rights, is pleased to announce that
the Company intends to raise up to GBP250 million by way of a
placing of new Ordinary Shares (the "Placing") at a price of 116
pence per Ordinary Share (the "Issue Price").
In conjunction with the Placing, there will be an offer made on
the PrimaryBid platform of new Ordinary Shares at the Issue Price
(the "Retail Offer") (together with the Placing the "Issue") to
provide retail investors with an opportunity to participate in the
equity fundraising alongside institutional investors. A separate
announcement will be made shortly regarding the Retail Offer and
its terms. For the avoidance of doubt, the Retail Offer is not part
of the Placing.
Highlights
-- Placing of up to 215,517,241 Ordinary Shares under the
Company's Placing Programme pursuant to the prospectus published by
the Company on 27 September 2019 (respectively the "Placing" and
the "Prospectus") to raise up to GBP250 million
-- Retail Offer of up to 3,642,583 Ordinary Shares to raise approximately GBP4 million
-- The issue price of 116 pence per Ordinary Share (the "Issue Price") represents a:
o 7.9% discount to the closing Ordinary Share price of 126 pence
on 18 September 2020
o 3.6% premium to the Adjusted Operative NAV of 111.98 pence per
Ordinary Share (being the last reported Operative NAV of 116.73p on
31 March 2020 as adjusted for (i) 2.43 pence per Ordinary Share in
respect of the dividends totalling 2.50 pence per Ordinary Share
for the 6 month period from 1 January 2020 to 30 June 2020 which
were declared and paid in May 2020 and July 2020 in respect of the
Ordinary Shares in issue at that time, (ii) unaudited accrued
earnings of 2.26 pence per Ordinary Share for the five and a half
month period from 1 April 2020 to 18 September 2020, and (iii)
decrease in the Fair Value of the catalogues owned at 31 March 2020
of 4.58 pence per Ordinary Share to reflect the strengthening of
the GBP to USD exchange rate from 1.2407 on 31 March 2020 to 1.2948
on 18 September 2020)
-- The Company announced on 9 September that it has invested
approximately 82% of the net proceeds from its July C Share
fundraising. Since then the Company has acquired several more
Catalogues including Chrissie Hynde, Rick James and Steve
Robson
-- The net proceeds of the Issue are expected to be used to fund
the acquisition of a significant pipeline of catalogues with a
blended acquisition multiple of approximately 18x historic annual
income (the "Pipeline Catalogues")
-- The Investment Adviser believes that the Pipeline Catalogues
include some of the most influential hit songs of each of the past
six decades which offer significant Song Management opportunities
and will further diversify the Company's income by artist, genre
and vintage
-- The Investment Adviser is also in discussions on further
catalogues with an aggregate consideration of more than GBP1
billion
-- N+1 Singer Advisory LLP ("N+1 Singer"), J.P. Morgan
Securities plc (which conducts its UK investment banking activities
as J.P. Morgan Cazenove) ("JPMC") and RBC Capital Markets ("RBC")
are acting as joint bookrunners in connection with the Placing (the
"Joint Bookrunners")
Merck Mercuriadis, Founder of Hipgnosis Songs Fund Limited and
The Family (Music) Limited, said:
"We have made a significant impact on the songwriting community
over the last 2 plus years and the overwhelming love and support we
have from these great creators has led to further opportunities on
evergreen songs and catalogues. I would like to thank all the
songwriters, artists and producers that have made us first choice
to look after your incomparable legacies."
Information on the Pipeline Catalogues
The Investment Adviser has identified and secured exclusivity on
approximately 50 Catalogues that are in line with the Company's
investment policy with an aggregate acquisition value of
approximately GBP250 million representing a blended acquisition
multiple of 18.3x historic annual income.
The higher average multiple of the Pipeline Catalogues reflects
that they include the Catalogues of some of the most influential
and successful songwriters of each of the past six decades.
Accordingly, the Investment Adviser believes that the acquisition
of the Pipeline Catalogues will provide the following benefits to
shareholders:
-- The acquisition of a highly stable and predictable income
stream, which grew significantly from 2019 to 2020
-- Influential hit songs with opportunities for the Investment
Adviser to grow income from active Song Management
-- Increased diversification of income from songs spanning a
broad range of artists, genres and vintages
The Investment Adviser is also in discussions on further
catalogues with an aggregate consideration of more than GBP1
billion which could be acquired within 3 months should the
acquisition of any of the Pipeline Catalogues not proceed.
Proposed Placing under the Placing Programme
Hipgnosis will issue up to 215,517,241 new Ordinary Shares
pursuant to the Placing (the "Placing Shares"). The final number of
Placing Shares will be agreed between the Company and Joint
Bookrunners following close of the Placing, and announced shortly
thereafter. The Board reserves the right, in consultation with the
Investment Adviser and Joint Bookrunners, to increase the size of
the Placing if there is excess demand.
The Placing shall commence immediately following this
announcement and will be closed at 11 a.m.on 24 September 2020 but
may be closed earlier or later at the discretion of the Company and
the Joint Bookrunners.
The Joint Bookrunners may choose to accept applications, either
in whole or in part, on the basis of allocations determined in
agreement with the Company, and may scale back any applications for
this purpose on such basis as the Company and the Joint Bookrunners
may determine. The Joint Bookrunners may also, notwithstanding the
above and subject to the prior consent of the Company: (i) allocate
Placing Shares after the time of any initial allocation to any
person submitting an application after that time, and (ii) allocate
Placing Shares after the Placing has closed to any person
submitting an application after that time. The Company's Board, in
consultation with the Joint Bookrunners, may also decide not to
proceed with the Placing for any reason. In this case, an
announcement will be made by the Company. Application will be made
to the London Stock Exchange for any Placing Shares issued pursuant
to the Placing to be admitted to the Premium listing segment of the
Official List of the FCA and to the London Stock Exchange's Premium
segment of the Main Market ("Admission").
The Placing will be made on a non-pre-emptive basis. The Placing
is conditional upon, inter alia, Admission becoming effective on or
before 25 September 2020.
The Placing is being made pursuant to the terms and conditions
set out in Part X of the Prospectus. Investors are invited to apply
for new Placing Shares pursuant to the Placing by contacting their
usual contact at N+1 Singer, JPMC or RBC.
A copy of the Prospectus and the supplementary prospectuses
published by the Company on 25 June 2020 and 14 July 2020 are
available on the Company's website
www.hipgnosissongs.com/disclaimer, subject to certain access
restrictions. They are also available for inspection at the
Company's Administrator's office, Ocorian Administration (Guernsey)
Limited, P.O. Box 286, Floor 2, Trafalgar Court, Les Banques, St.
Peter Port, Guernsey, GY1 4LY. They can also be found at the
National Storage Mechanism via
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Expected Timetable of Principal Events
Date of this Announcement 21 September 2020
Latest time and date for receipt of 11 a.m. on 24 September
placing commitments under the Placing 2020
Publication of results of the Issue 24 September 2020
Admission and commencement of dealings 8:00 a.m. on 25 September
in the Placing Shares 2020
Admission and commencement of dealings 8:00 a.m. on 25 September
in new Ordinary Shares issued pursuant 2020
to the Retail Offer
Dealing codes
ISIN for the Ordinary Shares to be issued GG00BFYT9H72
pursuant to the Issue
SEDOL for the Ordinary Shares to be issued BFYT9H7
pursuant to the Issue
Ticker code for the Ordinary Shares to SONG
be issued pursuant to the Issue
For further information, please contact:
The Family (Music) Limited Tel: +44 (0)1481 742742
Merck Mercuriadis
N+1 Singer - Joint Corporate Broker Tel: +44 (0)20 7496
James Maxwell / James Moat (Corporate 3000
Finance)
Alan Geeves / James Waterlow / Sam Greatrex
(Sales)
J.P. Morgan Cazenove - Joint Corporate Tel: +44 (0)20 7742
Broker 4000
William Simmonds / Jérémie Birnbaum
(Corporate Finance)
James Bouverat (Sales)
RBC Capital Markets - Joint Corporate Tel: +44 (0)20 7635
Broker 4000
Will Smith / Elliot Thomas / Lauren Davies
(Corporate Finance)
Lisa Tugwell (Sales)
Ocorian - Company Secretary & Administrator Tel: +44 (0) 1481 742614
Mariana Enevoldsen
The Outside Organisation Tel: +44 (0)7711 081
Alan Edwards / Nick Caley 843
FTI Consulting Tel: +44 (0)7771 978220;
Neil Doyle/ Paul Harris/ Laura Ewart +44 (0)7809 411882;
+44 (0)7761 332646
All US music publicity enquiries
Fran Defeo +1 917 767 5255
NOTES TO EDITORS
About Hipgnosis Songs Fund Limited
( www.hipgnosissongs.com )
Hipgnosis, which was founded by Merck Mercuriadis, is a Guernsey
registered investment company established to offer investors a
pure-play exposure to songs and associated musical intellectual
property rights. The Company has raised a total of over GBP860
million (gross equity capital) through its Initial Public Offering
on 11 July 2018, and subsequent issues in April 2019, August 2019,
October 2019 and July 2020. In September 2019, Hipgnosis
transferred its entire issued share capital to the Premium listing
segment of the Official List of the FCA and to the London Stock
Exchange's Premium segment of the Main Market.
About The Family (Music) Limited
The Company's Investment Adviser is The Family (Music) Limited,
which was founded by Merck Mercuriadis, former manager of globally
successful recording artists, such as Elton John, Guns N' Roses,
Morrissey, Iron Maiden and Beyoncé, and hit songwriters such as
Diane Warren, Justin Tranter and The-Dream, and former CEO of The
Sanctuary Group plc. The Investment Adviser has assembled an
Advisory Board of highly successful music industry experts which
include award winning members of the artist, songwriter,
publishing, legal, financial, recorded music and music management
communities, all with in-depth knowledge of music publishing.
Members of The Family (Music) Limited Advisory Board include Nile
Rodgers, The-Dream, Giorgio Tuinfort, Starrah, Nick Jarjour, David
Stewart, Bill Leibowitz, Ian Montone, Jason Flom, Bjorn Lindvall
and Chris Helm.
IMPORTANT NOTE
The Placing Shares that will be the subject of the Placing are
not being offered or sold to any person in the European Union,
other than to "qualified investors" as defined in Article 2(e) of
the Prospectus Regulation (Regulation (EU) 2017/1129) which
includes legal entities which are regulated by the Financial
Conduct Authority or entities which are not so regulated whose
corporate purpose is solely to invest in securities.
All offers of Placing Shares will be made pursuant to the
Prospectus, as supplemented by the supplementary prospectuses
published by the Company on 25 June 2020 and 14 July 2020 (the
"Supplementary Prospectuses"). This announcement does not
constitute or form part of, and should not be construed as, any
offer or invitation or inducement for sale, transfer or
subscription of, or any solicitation of any offer or invitation to
buy or subscribe for or to underwrite, any share in the Company or
to engage in investment activity (as defined by the Financial
Services and Markets Act 2000) in any jurisdiction nor shall it, or
any part of it, or the fact of its distribution form the basis of,
or be relied on in connection with, any contract or investment
decision whatsoever, in any jurisdiction. This announcement does
not constitute a recommendation regarding any securities.
The information in this announcement is for information purposes
only and does not purport to be full or complete. No reliance may
be placed for any purpose on the information contained in this
announcement or its accuracy or completeness. The material set
forth herein is not intended, and should not be construed, as an
offer of securities for sale or subscription in the United States
or any other jurisdiction. Any purchase of shares should be made
solely on the basis of the information contained in the Prospectus
and the Supplementary Prospectuses.
This announcement is not for publication or distribution,
directly or indirectly, in or into the United States (including its
territories and possessions, any state of the United States and the
District of Columbia), Australia, Canada, South Africa or Japan.
The distribution of this announcement may be restricted by law in
certain jurisdictions and persons into whose possession any
document or other information referred to herein comes should
inform themselves about and observe any such restriction. Any
failure to comply with these restrictions may constitute a
violation of the securities laws of any such jurisdiction.
The Company will not be registered under the US Investment
Company Act of 1940, as amended. In addition, the Company's shares
referred to herein have not been and will not be registered under
the US Securities Act of 1933 (the "Securities Act") or under the
securities laws of any state of the United States and may not be
offered or sold in the United States or to or for the account or
benefit of US persons absent registration or pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and in compliance
with any applicable State securities laws. The offer and sale of
Placing Shares referred to herein has not been and will not be
registered under the Securities Act or under the applicable
securities laws of any state, province or territory of Australia,
Canada, South Africa or Japan. Subject to certain exceptions, the
Company's shares referred to herein may not be offered or sold in
Australia, Canada, South Africa or Japan or to, or for the account
or benefit of, any national, resident or citizen of Australia,
Canada, South Africa or Japan. There will be no offer of the
Company's shares in the United States, Australia, Canada, South
Africa or Japan.
N+1 Singer is authorised and regulated in the United Kingdom by
the Financial Conduct Authority, and is acting exclusively for the
Company and no-one else in connection with the Placing. They will
not regard any other person as their respective clients in relation
to the Placing and will not be responsible to anyone other than the
Company for providing the protections afforded to their respective
clients, nor for providing advice in relation to the Placing, the
contents of this announcement or any transaction, arrangement or
other matter referred to herein.
JPMC, which is authorised by the Prudential Regulation Authority
and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the United Kingdom, is acting only for
Company in connection with the Placing and is not acting for or
advising any other person, or treating any other person as its
client, in relation thereto and will not be responsible for
providing the regulatory protection afforded to clients of JPMC or
advice to any other person in relation to the Placing. Neither JPMC
nor any of its directors, officers, employees, advisers or agents
accepts any responsibility or liability whatsoever for this
announcement, its contents or otherwise in connection with it or
any other information relating to the Company, whether written,
oral or in a visual or electronic format.
RBC, which is authorised by the Prudential Regulation Authority
and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the United Kingdom, is acting only for
Company in connection with the Placing and is not acting for or
advising any other person, or treating any other person as its
client, in relation thereto and will not be responsible for
providing the regulatory protection afforded to clients of RBC or
advice to any other person in relation to the Placing. Neither RBC
nor any of its directors, officers, employees, advisers or agents
accepts any responsibility or liability whatsoever for this
announcement, its contents or otherwise in connection with it or
any other information relating to the Company, whether written,
oral or in a visual or electronic format.
None of the Company, the Investment Adviser, N+1 Singer, RBC or
JPMC or any of their respective affiliates accepts any
responsibility or liability whatsoever for/or makes any
representation or warranty, express or implied, as to this
announcement, including the truth, accuracy or completeness of the
information in this announcement (or whether any information has
been omitted from the announcement) or any other information
relating to the Company whether written, oral or in a visual or
electronic form, and howsoever transmitted or made available or for
any loss howsoever arising from any use of the announcement or its
contents or otherwise arising in connection therewith. The Company,
the Investment Adviser, N+1 Singer, RBC and JPMC and their
respective affiliates accordingly disclaim all and any liability
whether arising in tort, contract or otherwise which they might
otherwise have in respect of this announcement or its contents or
otherwise arising in connection therewith.
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements involve known and unknown risks and uncertainties, many
of which are beyond the Company's control and all of which are
based on the Company's board of directors' current beliefs and
expectations about future events. These forward-looking statements
may be identified by the use of forward- looking terminology,
including the terms "believes", "estimates", "plans", "projects",
"anticipates", "expects", "intends", "may", "will" or "should" or,
in each case, their negative or other variations or comparable
terminology, or by discussions of strategy, plans, objectives,
goals, future events or intentions. These forward-looking
statements include all matters that are not historical facts.
Forward-looking statements may and often do differ materially from
actual results. Any forward-looking statements reflect the
Company's current view with respect to future events and are
subject to risks relating to future events and other risks,
uncertainties and assumptions relating to the Company's business,
the results of operations, financial condition prospects, growth
and dividend policy of the Company and the industry in which it
operates. Forward-looking statements speak only as of the date they
are made and cannot be relied upon as a guide to future
performance. These forward-looking statements and other statements
contained in this announcement regarding matters that are not
historical facts involve predictions. No assurance can be given
that such future results will be achieved; actual events or results
may differ materially as a result of risks and uncertainties facing
the Company. Such risks and uncertainties could cause actual
results to vary materially from the future results indicated,
expressed or implied in such forward-looking statements. Forward
looking statements speak only as of the date of this
announcement.
The Company has a limited trading history. Potential investors
should be aware that any investment in the Company is speculative,
involves a high degree of risk, and could result in the loss of all
or substantially all of their investment. Results can be positively
or negatively affected by market conditions beyond the control of
the Company or any other person. Past performance cannot be relied
upon as a guide to, or guarantee of, future performance.
Prospective investors are advised to seek expert legal, financial,
tax and other professional advice before making any investment
decision. The value of investments may fluctuate.
Information to distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("Directive 2014/65/EU"); (b)
Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593
supplementing Directive 2014/65/EU; and (c) local implementing
measures (together, the "MiFID II Product Governance
Requirements"), and disclaiming all and any liability, whether
arising in tort, contract or otherwise, which any "manufacturer"
(for the purposes of the MiFID II Product Governance Requirements)
may otherwise have with respect thereto, the Placing Shares have
been subject to a product approval process, which has determined
that the Placing Shares to be issued pursuant to the Placing are:
(i) compatible with an end target market of retail investors and
investors who meet the criteria of professional clients and
eligible counterparties, each as defined in Directive 2014/65/EU;
and (ii) eligible for distribution through all distribution
channels as are permitted by Directive 2014/65/EU (the " Target
Market Assessment ").
Notwithstanding the Target Market Assessment, distributors
should note that: the price of the Placing Shares may decline and
investors could lose all or part of their investment; the Placing
Shares offer no guaranteed income and no capital protection; and an
investment in the Placing Shares is compatible only with investors
who do not need a guaranteed income or capital protection, who
(either alone or in conjunction with an appropriate financial or
other adviser) are capable of evaluating the merits and risks of
such an investment and who have sufficient resources to be able to
bear any losses that may result therefrom. The Target Market
Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing Programmes. Furthermore, it is noted that,
notwithstanding the Target Market Assessment, N+1 Singer, JPMC and
RBC will only procure investors who meet the criteria of
professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of Directive 2014/65/EU; or (b) a recommendation
to any investor or group of investors to invest in, or purchase, or
take any other action whatsoever with respect to the Placing
Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Placing Shares and determining
appropriate distribution channels.
PRIIPS Regulation
In accordance with the Regulation (EU) No 1286/2014 of the
European Parliament and of the Council of 26 November 2014 on key
information documents for packaged retail and insurance-based
investment products (PRIIPs) and its implementing and delegated
acts (the "PRIIPs Regulation"), a key information document in
respect of the Placing Shares has been prepared by Hipgnosis Songs
Fund Limited and is available to investors at
www.hipgnosissongs.com/disclaimer .
If you are distributing the Placing Shares, it is your
responsibility to ensure that the relevant key information document
is provided to any clients that are "retail clients".
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