REG - Alchemy Copyrights Hipgnosis Songs Fund Hipgnosis Songs-SOND Hipgnosis Songs-SONC - RECOMMENDED CASH OFFER FOR HIPGNOSIS
18/04/2024 07:00
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RNS Number : 1412L Alchemy Copyrights, LLC 18 April 2024
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
FOR IMMEDIATE RELEASE
18 April 2024
RECOMMENDED CASH OFFER FOR
HIPGNOSIS SONGS FUND LIMITED ("HIPGNOSIS")
BY
CONCORD CHORUS LIMITED ("BIDCO")
an entity indirectly controlled by Alchemy Copyrights, LLC, trading as Concord
("Concord")
to be implemented by means of a Court-sanctioned scheme of arrangement
under Part VIII of the Companies (Guernsey) Law, 2008 (as amended)
Summary
· The board of directors of each of Bidco and Hipgnosis
are pleased to announce that they have reached agreement on the terms of a
recommended cash offer pursuant to which Bidco will acquire the entire issued
and to be issued share capital of Hipgnosis (the "Acquisition").
· It is intended that the Acquisition will be implemented
by means of a Court-sanctioned scheme of arrangement under Part VIII of the
Companies Law (the "Scheme").
· Under the terms of the Acquisition, Scheme Shareholders
will receive:
for each Scheme Share US$1.16 in cash (the "Cash Consideration").
In addition, if prior to the date falling five Business Days prior to the
Court Hearing, the Investment Adviser, Hipgnosis (together with Hipgnosis Sub)
and Bidco have entered into a tripartite agreement to terminate the Investment
Advisory Agreement (the "IAA Termination Agreement") with effect from the
Effective Date, Scheme Shareholders will be entitled to share in an aggregate
additional consideration of up to US$25 million (the "Contingent
Consideration"). The Contingent Consideration, if payable, will be equal to
US$25 million less any amount payable to the Investment Adviser under the IAA
Termination Agreement (the "Contingent Consideration Amount"). For the
avoidance of doubt, such amount being reduced from the US$25 million would
exclude any sums payable to the Investment Adviser in satisfaction of accrued
fees and expenses due under the terms of the Investment Advisory Agreement,
and any other fees and expenses incurred in relation to the IAA Termination
Agreement. If the Contingent Consideration is payable, Scheme Shareholders
will each receive for each Scheme Share held, the Contingent Consideration
Amount divided by the number of Hipgnosis Shares in issue at the Scheme Voting
Record Time rounded down, on a per share basis, to the nearest US$0.001. The
maximum amount of Contingent Consideration a Scheme Shareholder may therefore
receive is US$0.020 per Scheme Share.
· The Cash Consideration values the entire issued and to
be issued ordinary share capital of Hipgnosis at approximately US$1,402.7
million.
· The Cash Consideration is equivalent to £0.932 per
Share based on the Announcement Exchange Rate.
· The Cash Consideration represents a premium of
approximately:
o 32.2 per cent. to the Closing Price of £0.71 on 17 April 2024 (being
the Latest Practicable Date);
o 36.5 per cent. to the six-month volume weighted average price per
Hipgnosis Share of £0.68 to 17 April 2024 (being the Latest Practicable
Date); and
o 4.3 per cent. to Hipgnosis' Adjusted 30 September 2023 Operative NAV per
Hipgnosis Share of US$1.11.
Background to, and reasons for, the Acquisition
· Concord has been an active acquirer of music rights and
companies for over a decade, with a proven track record of strategic
acquisitions and catalogue expansion. Since 2015, Concord has deployed more
than US$2.8 billion of capital and completed more than 100 transactions across
recorded music, music publishing and theatricals, as it seeks to grow its
business and scale and leverage its operations.
· Concord is a full-service music and theatrical rights
company with an extensive new release artist and writer programme. Concord's
global team provides artists, songwriters, playwrights and composers with
creative and administrative support in sync, licensing, marketing, promotion
and A&R.
· Concord continues to be active in the market, looking
at many potential transactions that meet its investment criteria. Concord and
its management have followed the progression of Hipgnosis since IPO and
believe that Hipgnosis' assets complement Concord's long-standing objective to
acquire high quality and long-term music assets. Concord believes that the
quality of Hipgnosis' assets are consistent with Concord's existing holdings,
and creators connected to the rights acquired will benefit from the services
of Concord's existing creative and administrative support teams globally.
· Concord intends to implement the Acquisition with the
support of its long-term financing partner, Apollo Global Management, Inc. via
certain investment funds, accounts or entities managed, advised and/or
affiliated with, and/or owned (in whole or in part) or controlled by, Apollo
Capital Management, L.P. and/or one or more or its affiliates ("Apollo").
Apollo has committed to provide financing for the Acquisition in the form of
debt capital, as well as a minority, indirect equity interest in the
Concord-controlled Bidco.
· Following completion of the Acquisition and a short
transition period, it is expected that Concord will take over the management
of Hipgnosis' assets, as is further set out in paragraph 10 of this
Announcement.
Background to, and reasons for, the Hipgnosis Directors' recommendation
· The Acquisition represents an attractive opportunity
for Hipgnosis Shareholders to immediately realise their holding in Hipgnosis
in cash for at least US$1.16 per Hipgnosis share, which represents a 32.2 per
cent. premium to the closing share price (as at the Latest Practicable Date)
and a 4.3 per cent. premium to the Adjusted 30 September 2023 Operative NAV.
· Since the failed continuation resolution in October
2023, the Board has carefully assessed all options for the future of the
Company with the aim of maximising value for shareholders and considers that
in absence of the Acquisition, all alternative options carry significant
risks, uncertainties and limitations.
· In particular, the Board believes that the share price
is unlikely to increase to reflect the Adjusted 30 September 2023 Operative
NAV or the Cash Consideration in the medium term as a result of numerous
Company-specific and certain market issues. The Board considers that, in order
to achieve a material improvement in the share price, the Company needs to
undergo, and evidence the benefits of, substantial financial and governance
changes to improve its financial performance.
· The Board recognises that the terms and timing
achievable in any process to realise value from the Company's assets, either
by way of a managed wind down or via the sale of the Company or its assets,
are uncertain and may not occur on terms equal to or greater than the Adjusted
30 September 2023 Operative NAV or the Cash Consideration.
· In arriving at its recommendation, the Board spoke to a
number of potentially interested parties during the course of its strategic
review. During this period, the Board received a number of indicative and
preliminary proposals, including a number of earlier proposals from Concord,
all of which were less certain, and at a lower value than US$1.16 (and the
implied Sterling value as at the Latest Practicable Date).
· Accordingly, following careful consideration, the
Hipgnosis Board intends to unanimously recommend that Scheme Shareholders vote
in favour of the Scheme at the Court Meeting and that Hipgnosis Shareholders
vote in favour of the Resolution at the General Meeting.
Recommendation
· The Hipgnosis Directors, who have been so advised by
Singer Capital Markets as to the financial terms of the Acquisition,
unanimously consider the terms of the Acquisition to be fair and reasonable.
In providing its advice to the Hipgnosis Directors, Singer Capital Markets has
taken into account the commercial assessments of the Hipgnosis Directors.
Singer Capital Markets is providing independent financial advice to the
Hipgnosis Directors for the purposes of Rule 3 of the Takeover Code.
· Accordingly, the Hipgnosis Directors intend to
recommend unanimously that Scheme Shareholders vote in favour of the Scheme at
the Court Meeting and that Hipgnosis Shareholders vote in favour of the
Resolution at the General Meeting (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, that Hipgnosis Shareholders accept or
procure acceptance of the Takeover Offer), and have irrevocably undertaken to
do so in respect of their own beneficial holdings totalling in aggregate
327,796 Hipgnosis Shares, representing approximately 0.03 per cent. of the
issued share capital of Hipgnosis as at the Latest Practicable Date.
Irrevocable Undertakings and Letters of Intent
· In addition to the irrevocable undertakings given by
the Hipgnosis Directors as set out above, Bidco has received irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting, and in
favour of the Resolution to be proposed at the General Meeting (or, in the
event that the Acquisition is implemented by way of a Takeover Offer, to
accept or procure acceptance of the Takeover Offer), from Asset Value
Investors Limited, CCLA Investment Management, Schroder & Co Limited, J O
Hambro Capital Management Limited, Madison Avenue Partners, LP, Gresham House
Asset Management Ltd, Hawksmoor Investment Management and Premier Fund
Managers Limited in respect of, in aggregate, 284,917,641 Hipgnosis Shares
representing approximately 23.56 per cent. of Hipgnosis' issued share capital
as at the Latest Practicable Date.
· Bidco has therefore received irrevocable undertakings
from the Hipgnosis Directors and certain of the Hipgnosis Shareholders in
respect of, in aggregate, 285,245,437 Hipgnosis Shares representing
approximately 23.59 per cent. of Hipgnosis' issued share capital as at the
Latest Practicable Date.
· Bidco has also received a letter of intent to vote in
favour of the Scheme at the Court Meeting, and in favour of the Resolution to
be proposed at the General Meeting (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept or procure acceptance of the
Takeover Offer), from Investec Wealth & Investment Limited in respect of,
in aggregate, 70,000,000 Hipgnosis Shares representing approximately 5.79 per
cent. of Hipgnosis' issued share capital as at the Latest Practicable Date.
· The total number of Hipgnosis Shares which are
therefore subject to irrevocable undertakings or a letter of intent received
by Bidco from Hipgnosis Shareholders is 355,245,437 Hipgnosis Shares,
representing in aggregate approximately 29.38 per cent. of Hipgnosis' issued
share capital as at the Latest Practicable Date. Further details of the
irrevocable undertakings and letter of intent given to Bidco (and the
circumstances in which such arrangements will cease to be binding or otherwise
fall away) are set out in Appendix 3 to this Announcement.
Timetable and Conditions
· It is intended that the Acquisition will be implemented
by way of a Court-sanctioned scheme of arrangement under Part VIII of the
Companies Law. However, subject to the Panel's consent, Bidco reserves the
right to elect to implement the Acquisition by way of a Takeover Offer.
· The Acquisition will be put to Scheme Shareholders at
the Court Meeting and to Hipgnosis Shareholders at the General Meeting. In
order to become Effective, the Scheme must be approved by a majority in number
of Scheme Shareholders voting at the Court Meeting, either in person or by
proxy, representing at least 75 per cent. of the voting rights of such Scheme
Shareholders. In addition, the Resolution, a special resolution to authorise
the Hipgnosis Directors to take all actions necessary for carrying the Scheme
into effect and to amend the Hipgnosis Articles, must be passed by Hipgnosis
Shareholders (either in person or by proxy) representing at least 75 per cent.
of the votes cast on that resolution at the General Meeting.
· The Acquisition will be made in accordance with the
Takeover Code and on the terms and subject to the Conditions which are set out
in Appendix 1 to this Announcement and on the further terms and conditions
that will be set out in the Scheme Document. The Conditions include (amongst
others) the receipt of relevant merger control clearances in the European
Union.
· It is expected that the Scheme Document, containing
further information about the Acquisition and notices of the Court Meeting and
the General Meeting, together with the Forms of Proxy, will be published as
soon as practicable and, in any event, within 28 days of this Announcement,
unless Bidco and Hipgnosis otherwise agree, and the Panel consents, to a later
date. It is expected that the Scheme will become Effective in the third
quarter of this year, subject to the satisfaction of the Conditions and the
further terms set out in Appendix 1 to this Announcement and to the full terms
and conditions of the Acquisition which will be set out in the Scheme
Document.
Commenting on the Acquisition, Robert Naylor, Chairman of Hipgnosis said:
"The Board is pleased to announce and unanimously recommend this US$1.4
billion Offer for Hipgnosis from Concord. The acquisition represents an
attractive opportunity for our shareholders to immediately realise their
holding at a premium, mitigating the risks we see ahead to achieving a
material improvement in the share price. At the same time, the Board is
confident that Concord, one of the world's leading independent music
companies, is the right owner to take on the Hipgnosis catalogue and manage it
in the interests of composers and performers.
We would now encourage Hipgnosis Song Management, the Company's Investment
Adviser and Blackstone, which is HSM's majority owner, through funds they
manage and/or advise, to agree an orderly termination of the Investment
Advisory Agreement. This would enable the payment of a larger consideration
under the agreed transaction with Concord and bring to an end a period of
uncertainty for all Hipgnosis stakeholders."
Commenting on the Acquisition, Bob Valentine, CEO of Concord said:
"We are pleased to be announcing this Offer for Hipgnosis, which has been
unanimously recommended by its Board and has the support of 29.38 per cent. of
their shareholders. We believe we are offering a fair price for Hipgnosis'
catalogues and music assets, giving its shareholders the opportunity to
realise their investment at a significant premium to the prevailing share
price in cash.
Concord is the world's leading independent music company, with extensive
experience in developing, producing, and marketing recordings and songs around
the world in order to maximise their value. We believe we can integrate
Hipgnosis' catalogues into our wider portfolio of 1.2 million songs in a way
that will deliver benefits for composers, performers and all our
stakeholders."
This summary should be read in conjunction with, and is subject to, the full
text of this Announcement and its Appendices. The Acquisition will be subject
to the Conditions and further terms set out in Appendix 1 to this Announcement
and to the full terms and conditions which will be set out in the Scheme
Document. Appendix 2 to this Announcement contains the sources of information
and bases of calculation of certain information contained in this
Announcement. Appendix 3 to this Announcement contains a summary of the
irrevocable undertakings and letters of intent received in relation to the
Acquisition. The valuation report for Hipgnosis' portfolio of investments as
at 26 March 2024 is set out in Appendix 4 to this Announcement pursuant to
Rule 29 of the Takeover Code. Appendix 5 to this Announcement contains
definitions of certain expressions used in this summary and in this
Announcement.
Enquiries:
Concord
+1 629 401 3906
Kelly Voigt (SVP, Corporate Communications)
Apollo
+44 20 7016 5000
Erin Clark
J.P. Morgan Cazenove (Sole Financial Adviser to Bidco)
+44 203 493 8000
Jonty Edwards
Rupert Budge
Edward Hatter
Greg Slack
H/Advisors Maitland (PR Adviser to Bidco)
Neil Bennett
+44 7900 000777
Jonathan Cook
+44 7730 777865
Hipgnosis
+44 207 496 3000
Robert Naylor,
Chairman
Via Singer Capital Markets
Singer Capital Markets (Sole Rule 3 Adviser, Financial Adviser and Corporate
Broker to Hipgnosis)
James
Moat
+44 207 496 3000
Alaina Wong
Sam Butcher
Jalini Kalaravy
Shot Tower Capital LLC (Valuer and Strategic Advisor to Hipgnosis)
+1 410 376 7900
David
Dunn
Robert Law
Rick Roebuck
Will Ponsi
Headland Consultancy (PR Adviser to Hipgnosis)
+44 203 805 4822
Susanna
Voyle
Charlie Twigg
Reed Smith LLP is retained as UK legal adviser to Concord and Bidco, Latham
& Watkins (London) LLP is retained as UK legal adviser to Apollo, and
Shoosmiths LLP is retained as UK legal adviser to Hipgnosis. DLA Piper LLP and
DLA Piper UK LLP are retained as legal adviser to Concord and Bidco in
connection with finance aspects of the transaction.
Mourant Ozannes (Guernsey) LLP is retained as Guernsey legal adviser to
Concord and Carey Olsen (Guernsey) LLP is retained as Guernsey legal adviser
to Hipgnosis.
Important notices
J.P. Morgan Securities LLC together with its affiliate J.P. Morgan Securities
plc, which conducts its UK investment banking business as J.P. Morgan Cazenove
and which is authorised in the United Kingdom by the Prudential Regulation
Authority (the "PRA") and regulated in the United Kingdom by the PRA and the
FCA (together, "J.P. Morgan Cazenove") is acting as financial adviser
exclusively to Bidco and no one else in connection with the Acquisition and
will not regard any other person as their client in relation to the
Acquisition and will not be responsible to anyone other than Bidco for
providing the protections afforded to clients of J.P. Morgan Cazenove or its
affiliates, nor for providing advice in relation to the Acquisition or any
other matter or arrangement referred to herein.
Singer Capital Markets Advisory LLP ("Singer Capital Markets"), which is
authorised and regulated in the United Kingdom by the FCA, is acting as sole
Rule 3 adviser, financial adviser and corporate broker exclusively for
Hipgnosis and no one else in connection with the matters described in this
Announcement and will not be responsible to anyone other than Hipgnosis for
providing the protections afforded to clients of Singer Capital Markets nor
for providing advice in connection with the matters referred to herein.
This Announcement is for information purposes only and is not intended to and
does not constitute, or form part of, an offer to sell or an invitation to
purchase any securities or a solicitation of an offer to buy, otherwise
acquire, subscribe for, sell or otherwise dispose of any securities pursuant
to the Acquisition or otherwise, nor shall there be any purchase, sale,
issuance or exchange of securities or such solicitation in any jurisdiction in
which such offer, invitation, solicitation, purchase, sale, issuance or
exchange is unlawful. The Acquisition will be made solely by means of the
Scheme Document (or, if the Acquisition is implemented by way of a Takeover
Offer, any document by which the Takeover Offer is made) and the accompanying
Forms of Proxy (or forms of acceptance, if applicable), which will contain the
full terms and conditions of the Acquisition, including details of how to vote
in respect of the resolutions proposed in connection with the Acquisition. Any
vote, approval, decision in respect of, or other response to, the Acquisition
should be made only on the basis of the information contained in the Scheme
Document (or any other document by which the Acquisition is made by way of a
Takeover Offer).
The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them, and the
release of this Announcement shall not give rise to any implication that there
has been no change in the facts set out in this Announcement since such date.
This Announcement does not constitute a prospectus or prospectus equivalent
document.
Hipgnosis Shareholders should not make any investment decision in relation to
the Acquisition except on the basis of the Scheme Document (or any other
document by which the Acquisition is made by way of a Takeover Offer).
Hipgnosis and Bidco urge Hipgnosis Shareholders to read the whole of the
Scheme Document when it becomes available because it will contain important
information relating to the Acquisition.
No person should construe the contents of this Announcement as legal,
financial or tax advice. If you are in any doubt about the contents of this
Announcement or the action you should take, you are recommended to seek your
own independent financial advice immediately from your stockbroker, bank
manager, solicitor, accountant or from an independent financial adviser duly
authorised under FSMA if you are resident in the United Kingdom, or another
appropriately authorised independent financial adviser, if you are in a
territory outside the United Kingdom.
Overseas Shareholders
This Announcement has been prepared for the purpose of complying with Guernsey
law, English law, the Takeover Code, the Market Abuse Regulation, the
Disclosure Guidance and Transparency Rules and the Listing Rules and
information disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with the laws
of jurisdictions outside the United Kingdom or Guernsey. Nothing in this
Announcement should be relied on for any other purpose.
The release, publication or distribution of this Announcement in or into,
jurisdictions other than the United Kingdom or Guernsey may be restricted by
the laws and/or regulations of those jurisdictions and therefore persons into
whose possession this Announcement comes who are subject to the laws and/or
regulations of any jurisdiction other than the United Kingdom or Guernsey
should inform themselves about and observe any such applicable laws and/or
regulations in their jurisdiction. In particular, the ability of persons who
are not resident in the United Kingdom or Guernsey to vote their Scheme Shares
or Hipgnosis Shares (as applicable) with respect to the Scheme at the Court
Meeting or the General Meeting, or to appoint another person as proxy to vote
at the Court Meeting or the General Meeting on their behalf, may be affected
by the laws of the relevant jurisdiction in which they are located. Further
details in relation to Overseas Shareholders will be contained in the Scheme
Document. Any failure to comply with any such restrictions may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person.
Unless otherwise determined by Hipgnosis or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no person may
vote in favour of the Scheme by any such use, means, instrumentality or form
from within a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that jurisdiction. Accordingly,
copies of this Announcement and all documents relating to the Acquisition are
not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction, and persons
receiving this Announcement and all documents relating to the Acquisition
(including custodians, nominees and trustees) must not mail or otherwise
distribute or send them in, into or from such jurisdictions where to do so
would violate the laws in that jurisdiction. If the Acquisition is implemented
by a Takeover Offer (unless otherwise permitted by applicable law or
regulation), the Takeover Offer may not be made, directly or indirectly, in or
into or by use of the mails or any other means or instrumentality (including,
without limitation, facsimile, email or other electronic transmission, telex
or telephone) of interstate or foreign commerce of, or any facility of a
national state or other securities exchange, of any Restricted Jurisdiction
and the Takeover Offer will not be capable of acceptance by any such use,
means, instrumentality or facilities or from or within any Restricted
Jurisdiction.
Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.
Additional information for US investors
Hipgnosis Shareholders in the United States should note that the Acquisition
relates to the securities of a Guernsey company with a listing on the London
Stock Exchange and is proposed to be effected by means of a scheme of
arrangement provided for under, and governed by, the Companies Law. This
Announcement, the Scheme Document and certain other documents relating to the
Acquisition have been or will be prepared in accordance with Guernsey law,
English law, the Takeover Code and UK disclosure requirements, format and
style, all of which differ from those in the United States. A transaction
effected by means of a scheme of arrangement is not subject to the tender
offer rules or the proxy solicitation rules under the US Exchange Act.
Accordingly, the Acquisition is subject to the procedural and disclosure
requirements and practices applicable to a scheme of arrangement involving a
target company organised in Guernsey and listed on the London Stock Exchange,
which differ from the procedural and disclosure requirements of the United
States tender offer rules and proxy solicitation rules under the US Exchange
Act. If, in the future, Bidco exercises the right to implement the Acquisition
by way of a Takeover Offer and determines to extend the offer into the United
States, the Acquisition will be made in compliance with applicable United
States laws and regulations. Such Takeover Offer would be made by Bidco and no
one else.
The financial information that is included in this Announcement or that may be
included in the Scheme Document, or any other documents relating to the
Acquisition, has been or will be prepared in accordance with IFRS and may not
be comparable to financial statements of companies in the United States or
other companies whose financial statements are prepared in accordance with US
generally accepted accounting principles.
The Hipgnosis Shares have not been approved or disapproved by the Securities
Exchange Commission or any US state securities commission, nor have any such
authorities passed judgment upon the fairness or the merits of the Acquisition
or determined if this Announcement is accurate or complete. Any representation
to the contrary is a criminal offence in the United States.
US holders of Hipgnosis Shares should also be aware that the transaction
contemplated herein may have tax consequences in the United States and that
such consequences, if any, are not described herein. US holders of Hipgnosis
Shares are urged to consult with independent professional advisors regarding
the legal, tax and financial consequences of the Acquisition applicable to
them.
It may be difficult for US holders of Hipgnosis Shares to enforce their rights
and claims arising out of US federal securities laws, since Hipgnosis is
incorporated outside the United States, and its officers and directors may be
residents of, and some or all of their assets may be located in, countries
other than the United States. US holders of Hipgnosis Shares may have
difficulty effecting service of process within the United States upon those
persons or recovering against judgments of US courts, including judgments
based upon the civil liability provisions of the US federal securities laws.
US holders may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of US securities laws. Further, it
may be difficult to compel a non-US company and its affiliates to subject
themselves to a US court's judgement.
In accordance with normal practice in the UK and Guernsey and consistent with
Rule 14e-5(b) of the US Exchange Act, Bidco, certain affiliated companies and
their nominees or brokers (acting as agents) may make certain purchases of, or
arrangements to purchase, shares in Hipgnosis outside the United States, other
than pursuant to the Acquisition, until the date on which the Acquisition
and/or Scheme becomes Effective, lapses or is otherwise withdrawn. If such
purchases or arrangements to purchase were to be made, they would occur either
in the open market at prevailing prices or in private transactions at
negotiated prices and comply with applicable law, including the US Exchange
Act. Any information about such purchases or arrangements to purchase will be
disclosed as required in the United Kingdom, will be reported to a Regulatory
Information Service and will be available on the London Stock Exchange website
at www.londonstockexchange.com.
Further details in relation to US investors will be contained in the Scheme
Document.
Forward-looking statements
This Announcement (including information incorporated by reference in this
Announcement), oral statements made regarding the Acquisition, and other
information published by Concord, Apollo, Bidco or Hipgnosis contain
statements about Bidco and Hipgnosis and/or the Wider Bidco Group that are or
may be deemed to be forward-looking statements. All statements other than
statements of historical facts included in this Announcement, may be
forward-looking statements. Without limitation, any statements preceded or
followed by or that include the words "targets", "plans", "believes",
"expects", "aims", "intends", "will", "may", "anticipates", "estimates",
"hopes", "projects", "continue", "schedule" or words or terms of similar
substance or the negative thereof, are forward-looking statements.
Forward-looking statements include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion
and growth of Concord's, Apollo's or Hipgnosis' or the Wider Bidco Group's
operations and potential synergies resulting from the Acquisition; and (iii)
the effects of government regulation on Concord's, Apollo's or Hipgnosis' or
the Wider Bidco Group's business.
These forward-looking statements are not based on historical fact and are not
guarantees of future performance. By their nature, such forward-looking
statements involve known and unknown risks and uncertainties that could
significantly affect expected results and are based on certain key
assumptions. Many factors could cause actual results to differ materially from
those projected or implied in any forward-looking statements. Many of these
risks and uncertainties relate to factors that are beyond the entities'
ability to control or estimate precisely. These factors include, but are not
limited to, the satisfaction of or failure to satisfy all or any of the
conditions to the Acquisition, as well as additional factors, such as changes
in political and economic conditions, changes in the level of capital
investment, retention of key employees, changes in customer habits, success of
business and operating initiatives and restructuring objectives, the impact of
any acquisitions or similar transactions, changes in customers' strategies and
stability, competitive product and pricing measures, changes in the regulatory
environment, fluctuations of interest and exchange rates and the outcome of
any litigation.
Neither Bidco or Hipgnosis, nor any of their respective associates or
directors, officers, employees or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed or implied
in any forward-looking statements in this Announcement will actually occur.
Due to such uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of the date
of this Announcement. All subsequent oral or written forward-looking
statements attributable to Bidco or Hipgnosis or any of their respective
members, directors, officers, employees or advisers or any persons acting on
their behalf are expressly qualified in their entirety by the cautionary
statement above. Bidco and Hipgnosis expressly disclaim any obligation to
update any forward-looking or other statements contained in this Announcement,
except as required by applicable law or by the rules of any competent
regulatory authority, whether as a result of new information, future events or
otherwise.
Disclosure requirements of the City Code on Takeovers and Mergers
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 p.m. (London time) on the 10(th)
Business Day (as defined in the Takeover Code) following the commencement of
the Offer Period and, if appropriate, by no later than 3.30 p.m. (London time)
on the 10(th) Business Day (as defined in the Takeover Code) following the
announcement in which any securities exchange offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree company or
of a securities exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant securities of
each of (i) the offeree company and (ii) any securities exchange offeror(s),
save to the extent that these details have previously been disclosed under
Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be
made by no later than 3.30 p.m. (London time) on the Business Day (as defined
in the Takeover Code) following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4 of the Takeover Code).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Right to switch to a Takeover Offer
Bidco reserves the right to elect, with the consent of the Panel, to implement
the Acquisition by way of a Takeover Offer for the entire issued and to be
issued ordinary share capital of Hipgnosis as an alternative to the Scheme. In
such an event, the Takeover Offer will be implemented on the same terms or, if
Bidco so decides, on such other terms being no less favourable (subject to
appropriate amendments), so far as applicable, as those which would apply to
the Scheme and subject to the amendment referred to in Part B of Appendix 1 to
this Announcement.
Publication of this Announcement on websites and availability of hard copies
A copy of this Announcement and the documents required to be published
pursuant to Rules 26.1 and 26.2 of the Takeover Code will be available, free
of charge, subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on
https://communications.singercm.com/p/4UWI-ETV/recommended-cash-offer-hipgnosis
and Bidco's website at www.projectchorus.com by no later than 12.00 p.m. on
the Business Day following the date of this Announcement.
In accordance with Rule 30.3 of the Takeover Code, Hipgnosis Shareholders and
persons with information rights may request a hard copy of this Announcement
by contacting Hipgnosis' registrars, Computershare Investor Services
(Guernsey) Limited, or by calling 0370 707 4040 or from overseas +44 370 707
4040. Calls are charged at the standard geographical rate and will vary by
provider. Calls outside the United Kingdom or Guernsey will be charged at the
applicable international rate. Lines are open between 8.30 a.m. to 5.30 p.m.
(London time), Monday to Friday (except public holidays in the UK and
Guernsey). Please note that Computershare Investor Services (Guernsey) Limited
cannot provide any financial, legal or tax advice. Calls may be recorded and
monitored for security and training purposes. For persons who receive a copy
of this Announcement in electronic form or via a website notification, a hard
copy of this Announcement will not be sent unless so requested. Such persons
may also request that all future documents, announcements and information to
be sent to them in relation to the Acquisition should be in hard copy form.
Information relating to Hipgnosis Shareholders
Please be aware that addresses, electronic addresses and certain information
provided by Hipgnosis Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Hipgnosis may be
provided to Bidco during the Offer Period as required under Section 4 of
Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Rounding
Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an exact arithmetic aggregation of the figures that precede
them.
Rule 2.9 of the Takeover Code
For the purposes of Rule 2.9 of the Takeover Code, Hipgnosis confirms that, as
at the Latest Practicable Date, it had 1,209,214,286 ordinary shares of no par
value in issue and admitted to trading on the London Stock Exchange and
2,000,000 shares held in treasury. The ISIN of the Hipgnosis Shares is
GG00BFYT9H72.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
FOR IMMEDIATE RELEASE
18 April 2024
RECOMMENDED CASH OFFER FOR
HIPGNOSIS SONGS FUND LIMITED ("HIPGNOSIS")
BY
CONCORD CHORUS LIMITED ("BIDCO")
an entity indirectly controlled by Alchemy Copyrights, LLC, trading as Concord
("Concord")
to be implemented by means of a Court-sanctioned scheme of arrangement
under Part VIII of the Companies (Guernsey) Law, 2008 (as amended)
1 Introduction
The board of directors of each of Bidco and Hipgnosis are pleased to announce
that they have reached agreement on the terms of a recommended cash offer
pursuant to which Bidco will acquire the entire issued and to be issued share
capital of Hipgnosis (the "Acquisition").
The Acquisition is intended to be implemented by means of a Court-sanctioned
scheme of arrangement between Hipgnosis and the Scheme Shareholders under Part
VIII of the Companies Law.
2 The acquisition
Under the terms of the Acquisition, which will be subject to the Conditions
and further terms set out in Appendix 1 to this Announcement and to the full
terms and conditions which will be set out in the Scheme Document, Scheme
Shareholders will receive:
for each Scheme Share US$1.16 in cash
In addition, if prior to the date falling five Business Days prior to the
Court Hearing, the Investment Adviser, Hipgnosis (together with Hipgnosis Sub)
and Bidco have entered into a tripartite agreement to terminate the Investment
Advisory Agreement (the "IAA Termination Agreement") with effect from the
Effective Date, Scheme Shareholders will be entitled to share in an aggregate
additional consideration of up to US$25 million (the "Contingent
Consideration"). The Contingent Consideration, if payable, will be equal to
US$25 million less any amount payable to the Investment Adviser under the IAA
Termination Agreement (the "Contingent Consideration Amount"). For the
avoidance of doubt, such amount being reduced from the US$25 million would
exclude any sums payable to the Investment Adviser in satisfaction of accrued
fees and expenses due under the terms of the Investment Advisory Agreement,
and any other fees and expenses incurred in relation to the IAA Termination
Agreement. If the Contingent Consideration is payable, Scheme Shareholders
will each receive for each Scheme Share held, the Contingent Consideration
Amount divided by the number of Hipgnosis Shares in issue at the Scheme Voting
Record Time rounded down, on a per share basis, to the nearest US$0.001. The
maximum amount of Contingent Consideration a Scheme Shareholder may therefore
receive is US$0.020 per Scheme Share.
The Cash Consideration values the entire issued and to be issued ordinary
share capital of Hipgnosis at approximately US$1,402.7 million.
The Cash Consideration is equivalent to £0.932 per Share based on the
Announcement Exchange Rate.
The Cash Consideration represents a premium of:
· approximately 32.2 per cent. to the Closing Price of £0.71 on 17
April 2024 (being the Latest Practicable Date);
· approximately 36.5 per cent. to the six-month volume weighted
average price per Hipgnosis Share of £0.68 on 17 April 2024 (being the Latest
Practicable Date); and
· approximately 4.3 per cent. to Hipgnosis' Adjusted 30 September
2023 Operative NAV per Hipgnosis Share of US$1.11.
The Hipgnosis Shares will be acquired by Bidco fully paid and free from all
liens, equitable interests, charges, security interests, encumbrances, rights
of pre-emption and any other third party rights or interests whatsoever and
together with all rights existing at the date of this Announcement or
thereafter attaching thereto, including (without limitation) the right to
receive and retain, in full, all dividends and other distributions (if any)
declared, made or paid or any other return of capital (whether by way of
reduction of share capital or share premium account or otherwise) made on or
after the date of this Announcement in respect of the Hipgnosis Shares.
For the purposes of this Announcement, Hipgnosis has prepared an Adjusted 30
September 2023 Operative NAV and Adjusted 30 September 2023 Operative NAV per
Hipgnosis Share.
Appendix 4 to this Announcement contains the valuation report for Hipgnosis'
portfolio of investments as at 26 March 2024 prepared by Shot Tower pursuant
to the requirements of Rule 29 of the Takeover Code.
Shot Tower will prepare a further updated valuation report for the purposes of
the Scheme Document and which will be reproduced in the Scheme Document.
As at the Latest Practicable Date, no discussions regarding the termination of
the Investment Advisory Agreement have taken place between Chorus and the
Investment Adviser, and there is therefore no guarantee whether and, if so,
what terms will be entered into in respect of the termination of the
Investment Advisory Agreement. Further announcements via a Regulatory
Information Service will be made in due course, as necessary.
Expected Timetable
It is expected that the Scheme Document will be published as soon as
practicable and, in any event, within 28 days of this Announcement, unless
Bidco and Hipgnosis otherwise agree, and the Panel consents, to a later date.
It is expected that the Court Meeting and the General Meeting will be held on
or around 10 June 2024 and that, subject to the satisfaction of the Conditions
and the further terms set out in Appendix 1 to this Announcement and to be set
out in full in the Scheme Document, the Scheme is expected to become Effective
in the third quarter of this year.
3 background to and reasons for the acquisition
Concord has been an active acquirer of music rights and companies for over a
decade, with a proven track record of strategic acquisitions and catalogue
expansion. Since 2015, Concord has deployed more than US$2.8 billion of
capital and completed more than 100 transactions across recorded music, music
publishing and theatricals, as it seeks to grow its business and scale and
leverage its operations.
Concord is a full-service music and theatrical rights company with an
extensive new release artist and writer programme. Concord's global team
provides artists, songwriters, playwrights and composers with creative and
administrative support in sync, licensing, marketing, promotion and A&R.
Concord continues to be active in the market, looking at many potential
transactions that meet its investment criteria. Concord and its management
have followed the progression of Hipgnosis since IPO and believe that
Hipgnosis' assets complement Concord's long-standing objective to acquire high
quality and long-term music assets. Bidco believes that the quality of
Hipgnosis' assets are consistent with Concord's existing holdings, and
creators connected to the rights acquired will benefit from the services of
Concord's existing creative and administrative support teams globally.
Concord intends to implement the Acquisition with the support of its long-term
financing partner, Apollo Global Management, Inc. via certain investment
funds, accounts or entities managed, advised and/or affiliated with, and/or
owned (in whole or in part) or controlled by, Apollo Capital Management, L.P.
and/or one or more or its affiliates ("Apollo"). Apollo has committed to
provide financing for the Acquisition in the form of debt capital, as well as
a minority, indirect equity interest in the Concord-controlled Bidco.
Following completion of the Acquisition and a short transition period, it is
expected that Concord will take over the management of Hipgnosis' assets, as
is further set out in paragraph 10 of this Announcement.
4 recommendation
The Hipgnosis Directors, who have been so advised by Singer Capital Markets as
to the financial terms of the Acquisition, unanimously consider the terms of
the Acquisition to be fair and reasonable. In providing its advice to the
Hipgnosis Directors, Singer Capital Markets has taken into account the
commercial assessments of the Hipgnosis Directors. Singer Capital Markets is
providing independent financial advice to the Hipgnosis Directors for the
purposes of Rule 3 of the Takeover Code.
For the reasons set out below, the Hipgnosis Directors intend to recommend
unanimously that Scheme Shareholders vote in favour of the Scheme at the Court
Meeting and that Hipgnosis Shareholders vote in favour of the Resolution at
the General Meeting (or, in the event that the Acquisition is implemented by
way of a Takeover Offer, that Hipgnosis Shareholders accept or procure
acceptance of the Takeover Offer), and have irrevocably undertaken to do so in
respect of their own beneficial holdings totalling in aggregate 327,796
Hipgnosis Shares, representing approximately 0.03 per cent. of the issued
share capital of Hipgnosis as at the Latest Practicable Date.
5 Background TO and reasons for the recommendation
Since its IPO in 2018, Hipgnosis has built a portfolio currently comprising
138 catalogues with more than 40,000 songs, which provide exposure for
investors to compositions performed by some of the top artists of the last 50
years. Hipgnosis' portfolio is, therefore, well positioned to deliver stable
income growth as it benefits from the expected market growth in music
revenues, driven by the continued adoption of paid-for subscription streaming.
However, as the portfolio is focused on Anglo-American pop, hip-hop and rock
genres it is not expected to grow as fast as the rate of the global music
market.
In October 2023, Hipgnosis shareholders overwhelmingly voted against the
Company continuing its business as a closed-ended investment company.
Following this, the Board has carefully assessed all options for the future of
the Company with the aim of maximising value for shareholders. The Board
considers that, in absence of the Acquisition, any and all alternative options
for the future of the Company carry significant risks and uncertainties and
limitations.
Most notably, the Company's shares have traded at a depressed level for a
prolonged period and currently trade at a material discount to both the
Adjusted 30 September 2023 Operative NAV and the Cash Consideration. The Board
believes that the share price is unlikely to increase to reflect the Adjusted
30 September 2023 Operative NAV or the Cash Consideration in the medium term,
as:
· There are numerous Company specific issues, as have been
previously announced, which have negatively impacted the Company's share
price, including:
o the governance failures identified by the proposed transaction to sell 29
Catalogues to Hipgnosis Songs Capital, an affiliate of the Company's
Investment Adviser;
o the findings of the Shot Tower due diligence report that informed the
Board's strategic review process; and
o the cancellation of the Company's dividends for the foreseeable future to
maintain compliance with its banking covenants and to use operating cash flows
to reduce gearing.
The Board considers that the Company therefore needs to undergo, and evidence
the benefits of, substantial financial and governance changes to improve
financial performance and achieve a material improvement in the share price,
which is unlikely to be achieved in the short to medium term.
· Since 2021, there has been a widespread de-rating of share prices
amongst listed investment funds invested across all alternative asset classes,
driven largely by the effects of monetary policy to manage a global
inflationary environment. Therefore, there is no assurance that, should
Hipgnosis resolve the issues stated above and improve its financial
performance, the share price will materially improve.
The Board also recognises that the terms and timing achievable in any process
to realise value from the Company's assets, either by way of a managed wind
down, or via the sale of the Company or its assets, are uncertain and may not
occur on terms equal to or greater than the Adjusted 30 September 2023
Operative NAV or the Cash Consideration.
Furthermore, should the Group dispose of its music catalogue, it may
crystallise tax charges, which would negatively impact shareholder returns.
The Company estimates that, in the event that the Group sells all of its music
catalogue at a price equal to the fair market value of the Hipgnosis
catalogue, the Group's potential tax charge on these disposals, based on
certain assumptions, would be approximately US$30 million*.
In light of these uncertainties, the Board considers that the Cash Offer
represents an attractive opportunity for Hipgnosis Shareholders to realise
their holding in Hipgnosis in cash for at least US$1.16 per Hipgnosis share,
which represents:
· a 32.2 per cent. premium to the share price (as at the Latest
Practicable Date); and
· a 4.3 per cent. premium to the Adjusted 30 September 2023
Operative NAV.
In arriving at its recommendation, the Board spoke to a number of potentially
interested parties during the course of its strategic review. During this
period the Board received a number of indicative and preliminary proposals,
including a number of earlier proposals from Concord, all of which were less
certain, and at a lower value than US$1.16 (and the implied Sterling value as
at the Latest Practicable Date).
Furthermore, the Board recognises that Hipgnosis' portfolio is part of a
specialised alternative asset class and that it is the only LSE-listed
investment company investing in music royalties The Board views Concord as a
suitable custodian of the Company and its assets from the perspective of all
stakeholders, in particular the artists and songwriters whose music rights are
owned by the Company. The Board has also appraised Concord's proven track
record and internal infrastructure in acquiring and administering music rights
and regard them as suitable for the scale of the Company's portfolio.
Accordingly, following careful consideration, the Hipgnosis Board intends to
unanimously recommend that Scheme Shareholders vote in favour of the Scheme at
the Court Meeting and that Hipgnosis Shareholders vote in favour of the
Resolution at the General Meeting.
*This potential tax charge reflects both the impact of the historic
amortisation of such assets, where the Group has already received a tax
benefit to the extent available in each year of ownership and any change in
value since purchase. This estimate does not include any assumptions as to the
utilisation of any brought forward tax losses potentially available to the
Group, tax deductible transaction expenses or from any potential opportunities
to optimise the structure of any sale of assets, which could result in a lower
tax charge on any future sale of the Group's assets.
6 irrevocable undertakings AND LETTERS OF INTENT
Bidco has received irrevocable undertakings from each of the Hipgnosis
Directors who are interested in Hipgnosis Shares to vote in favour of the
Scheme at the Court Meeting and vote in favour of the Resolution to be
proposed at the General Meeting (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept or procure acceptance of the
Takeover Offer), in respect of, in aggregate, 327,796 Hipgnosis Shares
representing approximately 0.03 per cent. of the issued share capital of
Hipgnosis as at the Latest Practicable Date.
In addition to the irrevocable undertakings given by the Hipgnosis Directors
as set out above, Bidco has received irrevocable undertakings to vote in
favour of the Scheme at the Court Meeting, and in favour of the Resolution to
be proposed at the General Meeting (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept or procure acceptance of the
Takeover Offer), from Asset Value Investors Limited, CCLA Investment
Management, Schroder & Co Limited, J O Hambro Capital Management Limited,
Madison Avenue Partners, LP, Gresham House Asset Management Ltd, Hawksmoor
Investment Management and Premier Fund Managers Limited in respect of, in
aggregate, 284,917,641 Hipgnosis Shares representing approximately 23.56 per
cent. of Hipgnosis' issued share capital as at the Latest Practicable Date.
Bidco has therefore received irrevocable undertakings from the Hipgnosis
Directors and certain of the Hipgnosis Shareholders in respect of, in
aggregate, 285,245,437 Hipgnosis Shares representing approximately 23.59 per
cent. of Hipgnosis' issued share capital as at the Latest Practicable Date.
Bidco has also received a letter of intent to vote in favour of the Scheme at
the Court Meeting, and in favour of the Resolution to be proposed at the
General Meeting (or, in the event that the Acquisition is implemented by way
of a Takeover Offer, to accept or procure acceptance of the Takeover Offer),
from Investec Wealth & Investment Limited in respect of, in aggregate,
70,000,000 Hipgnosis Shares representing approximately 5.79 per cent. of
Hipgnosis' issued share capital as at the Latest Practicable Date.
The total number of Hipgnosis Shares which are therefore subject to
irrevocable undertakings or letter of intent received by Bidco from Hipgnosis
Shareholders is 355,245,437 Hipgnosis Shares, representing in aggregate
approximately 29.38 per cent. of Hipgnosis' issued share capital as at the
Latest Practicable Date.
Further details of the irrevocable undertakings and letters of intent given to
Bidco (and the circumstances in which such arrangements will cease to be
binding or otherwise fall away) are set out in Appendix 3 to this
Announcement.
7 Information relating to Concord, Apollo AND BIDCO
Concord
Concord is an independent, worldwide leader in the development, management and
acquisition of sound recordings, music publishing and theatrical performance
rights and narrative content. It represents more than one million songs,
composed works, plays, musicals and active recordings. Headquartered in
Nashville, with additional offices in Berlin, London, Los Angeles, Melbourne,
Miami and New York and staff in Auckland, Sydney, Toronto and Tokyo, Concord's
repertoire is licensed globally. Concord has more than 650 employees,
augmented by global partners, that provide full administration and
distribution capabilities that allow it to service and manage assets of the
sort owned by Hipgnosis.
Concord has a proven track record of strategic acquisitions and catalogue
expansion. Since 2015, it has deployed more than US$2.8 billion of capital and
completed more than 100 transactions across recorded music, music publishing
and theatricals. Notable acquisitions include Imagem Music Group (2017), the
Imagine Dragons publishing catalogue (2020), the owned copyrights of Downtown
(2021), and the catalogues of Phil Collins and his Genesis bandmates Tony
Banks and Mike Rutherford (2022).
Most recently, Concord successfully acquired Round Hill Music Royalty Fund
(2023), providing shareholders with a desirable all-cash exit at a value that
received clear support from the market evidenced by the 99.9 per cent. votes
in favour of the transaction. Concord continues to actively make acquisitions
across all aspects of recorded music, music publishing and theatricals.
Apollo Global Management, Inc.
Apollo Global Management, Inc. ("AGM") is a high-growth, global alternative
asset manager. Through its fully integrated investment platform spanning the
full risk-reward spectrum from investment grade to private equity, AGM
provides innovative capital solutions to businesses and invests in all parts
of the capital structure. As of 31 December 2023, AGM had assets under
management of approximately US$651 billion across yield, hybrid, and equity
strategies. The Apollo Funds have extensive experience that spans public and
private credit and asset-backed financing as well equity investments and the
ownership of public and private businesses.
Bidco
Bidco is a newly established private limited company incorporated in England
and Wales for the purposes of the Acquisition. Bidco is a wholly owned
subsidiary of a newly formed holding company, Chorus SPV, LLC ("Holdco"), a
Delaware limited liability company, formed in connection with the Acquisition,
which is a wholly-owned indirect subsidiary of Concord as at the date of this
Announcement. At completion of the Acquisition, it is intended that Concord
will, indirectly via subsidiaries, hold 80 per cent. of the equity share
capital of Holdco and Apollo Funds will hold the remaining 20 per cent. of the
equity share capital of Holdco. Concord and Apollo have entered into the Bid
Conduct Agreement pursuant to which they have agreed to regulate their conduct
in connection with the co-investment in Bidco.
8 Information relating to Hipgnosis
Hipgnosis was launched in 2018 to offer investors a pure-play exposure to
music royalties and their associated intellectual property rights with a focus
on building a diversified portfolio, acquiring catalogues that are built
around proven hit songs of cultural importance by some of the most talented
and important songwriters globally.
Since launch, Hipgnosis has built a portfolio currently comprising 138
catalogues with more than 40,000 songs, containing copyright and income
streams derived from compositions performed by some of the top artists of the
last 50 years. Hipgnosis' portfolio is diversified across genres, artists,
vintages and right types.
Hipgnosis is a non-cellular Guernsey company registered with the GFSC as a
closed-ended collective investment scheme whose ordinary shares are admitted
to the Premium Listing Segment of the FCA's Official List and admitted to
trading on the Main Market of the London Stock Exchange. It is a self-managed
AIF under the EU AIFM Directive and the UK AIFMD.
9 dividends
The terms of the Acquisition are based on the assumption that no dividends or
other distributions will be authorised, declared or paid on or before the
Effective Date. Bidco reserves the right to reduce the price payable for each
Scheme Share pursuant to the Acquisition by up to the amount per Scheme Share
of any dividends or distributions authorised, declared or paid on or before
the Effective Date.
10 intentions for Hipgnosis
The Bidco Directors believe that, following completion of the Acquisition, the
Combined Group will have a stronger position, as a result of Concord's
enlarged catalogue post-acquisition and believes that the Acquisition provides
an attractive opportunity for Bidco to accelerate Concord's existing growth
strategy. The assets being acquired are of a quality and type consistent with
Concord's existing holdings, and Concord will leverage its existing operations
and expertise to create value for all stakeholders. Following the Acquisition,
the Bidco Directors intend that the assets of Hipgnosis will be fully
integrated into Concord's regular operations after a brief transition period
with the Investment Adviser, and managed alongside the other iconic assets
owned and managed by the Wider Bidco Group.
Board of Hipgnosis Directors
Following completion of the Acquisition, Bidco intends to de-list Hipgnosis
and to surrender Hipgnosis' registration as a collective investment scheme
regulated by the GFSC and as a self-managed AIF under the EU AIFM Directive
and the UK AIFMD. Consequently, Hipgnosis will not require listed company
governance structures and it is accordingly intended that each of the
Hipgnosis Directors will step down from the board of Hipgnosis upon completion
of the Acquisition.
The board of Bidco will remain unchanged following the Acquisition and will
continue to provide the complementary skills necessary to drive the Combined
Group forward following completion of the Acquisition.
Investment Adviser
Concord intend to engage with Hipgnosis and the Investment Adviser to discuss
the termination of the Investment Advisory Agreement with effect from the
Effective Date. Following a short transition period, Concord intend to assume
the delivery of those services currently provided by the Investment Adviser.
Any such assumption will be effected with a view to delivering optimal value
to stakeholders and continuity of service. If the Investment Advisory
Agreement is terminated, those persons employed by the Investment Adviser
whose principal role is to carry out activities on behalf of Hipgnosis shall
cease to carry out activities on behalf of Hipgnosis, unless arrangements are
made otherwise.
As at the Latest Practicable Date, no discussions regarding the termination of
the Investment Advisory Agreement have taken place between Concord and the
Investment Adviser, and there is therefore no guarantee whether and, if so,
what terms will be entered into in respect of the termination of the
Investment Advisory Agreement. Further announcements via a Regulatory
Information Service will be made in due course, as necessary.
Management, employees and pensions scheme
The Hipgnosis Group has 34 employees and offers a 401k plan to employees of
the Hipgnosis Group. Hipgnosis does not operate a defined benefit pension
plan. Bidco intends to review personnel requirements of the Combined Group
following completion of the Acquisition to ascertain its business needs. It is
likely that approximately 55 to 65 per cent. of existing roles in the
Hipgnosis Group will be terminated.
There are no forms of incentivisation arrangements with members of Hipgnosis'
management and Bidco has not entered into, and has not had any discussions on
proposals to enter into any form of incentivisation arrangements with members
of Hipgnosis' management.
Locations, registered office, fixed assets and R&D
The employees are currently based at leasehold premises in Tennessee,
California and New York. The premises in Tennessee, California and New York
are the only premises of Hipgnosis, other than its registered office.
Following completion of the Acquisition, Bidco will look to terminate the
leases for these premises, in accordance with the terms of the relevant lease.
Other than its registered office, Hipgnosis has no fixed place of business,
fixed assets (other than those held in its music catalogues and other
investments), research and development function or headquarters or headquarter
functions.
Listing
It is intended that dealings in, and registration of transfers of, Hipgnosis
Shares (other than the registration of the transfer of the Scheme Shares to
Bidco pursuant to the Scheme) will be suspended shortly before the Effective
Date at a time to be set out in the Scheme Document. It is further intended
that applications will be made to the London Stock Exchange to cancel trading
in the Hipgnosis Shares on the Main Market, and to the Financial Conduct
Authority to cancel the listing of the Hipgnosis Shares on the Official List,
in each case with effect from or shortly following the Effective Date. Further
details about the de-listing and cancellation of trading of the Hipgnosis
Shares can be found in paragraph 16.
Financing
Hipgnosis' existing debt facility arrangements will be repaid by Concord on
completion of the Acquisition.
No post-offer undertakings
No statements in this paragraph 10 are "post-offer undertakings" for the
purposes of Rule 19.5 of the Takeover Code.
In considering the recommendation of the Acquisition to Hipgnosis
Shareholders, the Hipgnosis Directors have given due consideration to Bidco's
intentions for Hipgnosis set out above.
11 Financing of the acquisition
The Acquisition will be financed by a combination of debt and equity
financing. The equity financing will be provided by Concord and the Apollo
Funds, and the debt financing will be provided by the Apollo Funds.
J.P. Morgan Cazenove, as financial advisor to Bidco, is satisfied that
sufficient resources are available to Bidco to enable it to satisfy in full
the Cash Consideration under the terms of the Acquisition.
Further information on the financing of the Acquisition will be set out in the
Scheme Document.
12 Offer-related arrangements
Confidentiality Agreement
Concord and Hipgnosis have entered into the Confidentiality Agreement (which
contains mutual confidentiality obligations) pursuant to which each party has
undertaken to keep confidential, and to procure that certain of its
representatives keep confidential, information relating to the other party
and/or to the Acquisition, to use such information solely for the agreed
purposes in relation to the Acquisition and not to disclose it to third
parties (other than to permitted disclosees) unless required by law or
regulation.
Co-Operation Agreement
Bidco, Concord and Hipgnosis have entered into the Co-Operation Agreement
pursuant to which, among other things, Bidco and Hipgnosis have undertaken to
use reasonable endeavours to implement the Acquisition and to promptly engage
with the European Commission or the relevant Governmental Body (as applicable)
in respect of the Regulatory Conditions.
Hipgnosis has undertaken to provide promptly such information and assistance
to Bidco as Bidco may reasonably require for the purposes of, among other
matters, satisfying the Regulatory Conditions.
The Co-Operation Agreement will terminate in certain circumstances, including
(subject to certain exceptions):
· if agreed in writing between the parties, at any time prior to
the Effective Date;
· upon service of written notice by Bidco to Hipgnosis, if one or
more of the following occurs:
i. prior to the Long Stop Date, a third party announces a possible offer
or firm intention to make an offer or revised offer (whether or not subject to
the satisfaction or waiver of any pre-conditions) for Hipgnosis which the
Hipgnosis Directors recommend or state publicly their intention to recommend;
or
ii. a Hipgnosis Board Adverse Recommendation Change (as defined in the
Co-Operation Agreement) occurs; or
· upon service of written notice by either party to the other
party, if one or more of the following occurs:
i. prior to the Long Stop Date, any Condition has been invoked by Bidco
(where (if permission is required) the invocation of the relevant Condition is
permitted by the Panel);
ii. prior to the Long Stop Date, a third party announces a possible
offer or firm intention to make an offer or revised offer (whether or not
subject to the satisfaction or waiver of any pre-conditions) for Hipgnosis
which completes, becomes effective or is declared or becomes unconditional in
all respects;
iii. if the Offer is withdrawn, terminated or lapses in accordance with
its terms prior to the Long Stop Date and, where required, with the consent of
the Panel (other than where: (i) such lapse or withdrawal is as a result of
the exercise of Bidco's right to effect a Switch (as defined in the
Co-Operation Agreement); or (ii) it is otherwise to be followed within five
(5) Business Days (or such other period as Hipgnosis and Bidco may agree) by
an announcement under Rule 2.7 of the Takeover Code made by Bidco or any
person acting in concert with Bidco (or deemed to be acting in concert with
Bidco) to implement the Offer by a different offer or scheme on substantially
the same or improved terms);
iv. if the Scheme is not approved by the Scheme Shareholders at the Court
Meeting and/or the Hipgnosis Shareholders at the General Meeting, or the Court
refuses to sanction the Scheme; or
v. unless otherwise agreed by the parties in writing or required by the
Panel, if the Effective Date has not occurred by the Long Stop Date.
The Co-Operation Agreement also includes an acknowledgement that Bidco intends
to engage with Hipgnosis and the Investment Adviser as soon as practicable
following this Announcement to agree terms for the termination of the
Investment Advisory Agreement with effect from the Effective Date.
13 Disclosure of interests in Hipgnosis
As at the close of business on the Latest Practicable Date, save for the
irrevocable undertakings referred to in paragraph 6 of this Announcement and
391,965 Hipgnosis Shares owned by certain senior executives of Concord, who
are deemed to be acting in concert with Bidco for the purposes of the
Acquisition, neither Apollo, Bidco nor any of the Bidco Directors nor, so far
as Bidco is aware, any person acting in concert (within the meaning of the
Takeover Code) with it for the purposes of the Acquisition had:
· any interest in or a right to subscribe for any relevant
securities of Hipgnosis;
· any short positions in respect of relevant securities of
Hipgnosis (whether conditional or absolute and whether in the money or
otherwise), including any short position under a derivative, any agreement to
sell or any delivery obligation or right to require another person to purchase
or take delivery;
· borrowed or lent any relevant securities of Hipgnosis (including,
for these purposes, any financial collateral arrangements of the kind referred
to in Note 4 on Rule 4.6 of the Takeover Code); or
· entered into any dealing arrangement of the kind referred to in
Note 11 on the definition of acting in concert in the Takeover Code, in
relation to any relevant securities of Hipgnosis.
For these purposes:
"interests in securities" arise, in summary, when a person has long economic
exposure, whether absolute or conditional, to changes in the price of
securities (and a person who only has a short position in securities is not
treated as interested in those securities). In particular, a person will be
treated as having an 'interest' by virtue of the ownership, voting rights or
control of securities, or by virtue of any agreement to purchase, option in
respect of, or derivative referenced to, securities; and
"relevant securities of Hipgnosis" are Hipgnosis Shares or securities
convertible or exchangeable into Hipgnosis Shares.
In the interests of secrecy prior to this Announcement, it has not been
practicable for Bidco to make enquiries of all of its concert parties in
advance of the release of this Announcement to determine whether any dealings
in Hipgnosis Shares by such persons give rise to a requirement under Rule 6 or
Rule 11 of the Takeover Code for Bidco to offer any minimum level, or
particular form, of consideration. Therefore, if Bidco becomes aware,
following the making of such enquiries, that any of its concert parties have
any such interests in relevant securities of Hipgnosis, all relevant details
in respect of Bidco's concert parties will be included in Bidco's Opening
Position Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8
of the Takeover Code (whether the right, option or obligation is conditional
or absolute and whether it is in the money or otherwise).
14 Opening Position Disclosure
Each of Bidco and Hipgnosis confirms that it will make an Opening Position
Disclosure, setting out the details required to be disclosed by it under Rule
8 of the Takeover Code, by no later than 12.00 p.m. (London time) on 2 May
2024.
15 Structure of the Acquisition
Scheme of arrangement
It is intended that the Acquisition will be effected by means of a
Court-sanctioned scheme of arrangement between Hipgnosis and Scheme
Shareholders under Part VIII of the Companies Law. The procedure involves,
among other things, an application by Hipgnosis to the Court to sanction the
Scheme, in consideration for which Scheme Shareholders who are on the
Hipgnosis register of members at the Scheme Record Time will receive
consideration for their Scheme Shares on the basis set out in paragraph 2
above. The purpose of the Scheme is to provide for Bidco to become the holder
of the entire issued and to be issued share capital of Hipgnosis.
Conditions
The implementation of the Scheme will be subject to the Conditions and further
terms set out in Appendix 1 to this Announcement and all terms and conditions
will be set out in full in the Scheme Document including, amongst other
things, the:
· the satisfaction or waiver of the Regulatory Conditions;
· approval of the Scheme by a majority in number of the Scheme
Shareholders who are present and voting (and entitled to vote), either in
person or by proxy, at the Court Meeting or at any adjournment or postponement
thereof and who represent not less than 75 per cent. of the voting rights held
by such Scheme Shareholders;
· passing of the Resolution by the requisite majority at the
General Meeting;
· sanction of the Scheme by the Court; and
· Scheme becoming Effective by 11.59 p.m. on the Long Stop Date.
The Scheme will lapse and the Acquisition will not take place if:
· either the Court Meeting or the General Meeting are not held by
the 22(nd) day after the expected date of such meeting to be set out in each
case in the Scheme Document (or such later date(s) as may be agreed between
Bidco and Hipgnosis and the Court may allow); or
· the Court Hearing to approve the Scheme is not held by the 22(nd)
day after the expected date of the Court Hearing to be set out in the Scheme
Document (or such later date as may be agreed between Bidco and Hipgnosis and
the Court may allow); or
· the Scheme does not become Effective by 11.59 p.m. on the Long
Stop Date,
provided however that the deadlines for the timing of the Court Meeting, the
General Meeting and the Court Hearing to approve the Scheme as set out above
may be waived by Bidco, and the deadline for the Scheme to become Effective
may be extended by agreement between Hipgnosis and Bidco (with the Panel's
consent and as the Court may approve (if such consent and/or approval is
required)).
Once the necessary approvals from Scheme Shareholders and Hipgnosis
Shareholders have been obtained and the other Conditions have been satisfied
or (where applicable) waived, the Scheme must be sanctioned by the Court (with
or without modification but with any such modification being acceptable to
Hipgnosis and Bidco). The Scheme will become Effective upon delivery to the
Guernsey Registry of a copy of the Court Order (which must occur within 7 days
after making the Court Order in accordance with the Companies Law). Upon the
Scheme becoming Effective, it will be binding on all Scheme Shareholders,
irrespective of whether or not they attended or voted at the Court Meeting or
the General Meeting (and if they attended and voted, whether or not they voted
in favour of the resolutions proposed at such meetings).
Further details of the Scheme, including an indicative timetable for its
implementation, will be set out in the Scheme Document, which, together with
the Forms of Proxy, is expected to be dispatched to Hipgnosis Shareholders as
soon as practicable and, in any event, within 28 days of this Announcement. It
is expected that the Court Meeting and the General Meeting will be held on or
around 10 June 2024 and that, subject to the satisfaction of the Conditions
and the further terms set out in Appendix 1 to this Announcement and the
further terms and conditions to be set out in full in the Scheme Document, the
Scheme is expected to become Effective in the third quarter of this year.
The Scheme will be governed by Guernsey law and will be subject to the
jurisdiction of the Court. The Scheme will be subject to the applicable
requirements of the Takeover Code, the Panel, the London Stock Exchange and
the FCA.
Right to switch to a Takeover Offer
Bidco has reserved the right to elect, subject to the consent of the Panel,
for the Acquisition to be implemented by way of a Takeover Offer. In this
event, the Takeover Offer will be implemented on the same terms, so far as
applicable, as those which would apply to the Scheme. If Bidco does elect to
implement the Acquisition by way of a Takeover Offer, and if sufficient
acceptances of such Takeover Offer are received and/or sufficient Hipgnosis
Shares are otherwise acquired, it is the intention of Bidco to apply the
provisions of Part XVIII of the Companies Law to acquire compulsorily any
outstanding Hipgnosis Shares to which such Acquisition relates.
16 Delisting of Hipgnosis shares
Prior to the Scheme becoming effective, Hipgnosis will make an application to
the London Stock Exchange to cancel trading in the Hipgnosis Shares on its
Main Market and to the Financial Conduct Authority to cancel the listing of
the Hipgnosis Shares from the Official List, in each case on or shortly after
the Effective Date. The last day of dealings in the Hipgnosis Shares on the
Main Market is expected to be the Business Day immediately prior to the Court
Hearing and no transfers will be registered after 6.00 p.m. on that date.
On the Effective Date, Hipgnosis will become a wholly owned subsidiary of
Bidco and share certificates in respect of Hipgnosis Shares will cease to be
valid and should be destroyed. In addition, entitlements to Hipgnosis Shares
held within the CREST system will be cancelled on the Effective Date.
Upon the Scheme becoming Effective, Bidco (and/or its nominee(s)) will acquire
the Scheme Shares fully paid and free from all liens, equitable interests,
charges, encumbrances and other third party rights of any nature whatsoever
and together with all rights attaching to them including the right to receive
and retain all dividends and distributions (if any) declared after the
Effective Date.
17 General
The bases and sources of certain financial information contained in this
Announcement are set out in Appendix 2 to this Announcement. A summary of the
irrevocable undertakings given in relation to the Acquisition is contained in
Appendix 3 to this Announcement. The valuation report for Hipgnosis' portfolio
of investments (as at 26 March 2024) is set out in Appendix 4 to this
Announcement pursuant to Rule 29 of the Takeover Code. Certain terms used in
this Announcement are defined in Appendix 5 to this Announcement.
Each of J.P. Morgan Cazenove and Singer Capital Markets has given and not
withdrawn its consent to the publication of this Announcement with the
inclusion herein of the references to its name in the form and context in
which it appears.
Shot Tower has given and not withdrawn its consent to the publication of its
valuation report in this Announcement with the inclusion of the references to
its name and, where applicable, the valuation report in the form and context
in which they are included.
18 Documents available on website
Copies of the following documents will be made available on
https://communications.singercm.com/p/4UWI-ETV/recommended-cash-offer-hipgnosis
and on Bidco's website at www.projectchorus.com by no later than 12.00 p.m.
London time on the Business Day following this Announcement until the end of
the Acquisition:
· a copy of this Announcement;
· the irrevocable undertakings and letters of intent referred to in
paragraphs 4 and 6 above and summarised in Appendix 3 to this Announcement;
· the written consents of J.P. Morgan, Singer Capital Markets and
Shot Tower to being named in this Announcement;
· the valuation report from Shot Tower;
· the Confidentiality Agreement;
· the Co-Operation Agreement; and
· documents relating to Bidco's financing of the Acquisition.
Enquiries:
Concord
+1 629 401 3906
Kelly Voigt (SVP, Corporate Communications)
Apollo
+44 20 7016 5000
Erin Clark
J.P. Morgan Cazenove (Sole Financial Adviser to Bidco)
+44 203
493 8000
Jonty Edwards
Rupert Budge
Edward Hatter
Greg Slack
H/Advisors Maitland (PR Adviser to Concord and Bidco)
Neil Bennett
+44 7900 000777
Jonathan Cook
+44 7730 777865
Hipgnosis
+44 207 496 3000
Robert Naylor,
Chairman
Via Singer Capital Markets
Singer Capital Markets (Sole Rule 3 Adviser, Financial Adviser and Corporate
Broker to Hipgnosis)
James
Moat
+44 207 496 3000
Alaina Wong
Sam Butcher
Jalini Kalaravy
Shot Tower Capital LLC (Valuer and Strategic Advisor to Hipgnosis)
+1 410 376 7900
David
Dunn
Robert Law
Rick Roebuck
Will Ponsi
Headland Consultancy (PR Adviser to Hipgnosis)
+44 203 805 4822
Susanna
Voyle
Charlie Twigg
Reed Smith LLP is retained as UK legal adviser to Concord and Bidco, Latham
& Watkins (London) LLP is retained as UK legal adviser to Apollo, and
Shoosmiths LLP is retained as UK legal adviser to Hipgnosis. DLA Piper LLP and
DLA Piper UK LLP are retained as legal adviser to Concord and Bidco in
connection with finance aspects of the transaction.
Mourant Ozannes (Guernsey) LLP is retained as Guernsey legal adviser to
Concord and Carey Olsen (Guernsey) LLP is retained as Guernsey legal adviser
to Hipgnosis.
Important notices
J.P. Morgan Securities LLC, together with its affiliate J.P. Morgan Securities
plc, which conducts its UK investment banking business as J.P. Morgan Cazenove
and which is authorised in the United Kingdom by the Prudential Regulation
Authority (the "PRA") and regulated in the United Kingdom by the PRA and the
FCA (together, "J.P. Morgan Cazenove") is acting as financial adviser
exclusively to Bidco and no one else in connection with the Acquisition and
will not regard any other person as their client in relation to the
Acquisition and will not be responsible to anyone other than Bidco for
providing the protections afforded to clients of J.P. Morgan Cazenove or its
affiliates, nor for providing advice in relation to the Acquisition or any
other matter or arrangement referred to herein.
Singer Capital Markets Advisory LLP ("Singer Capital Markets"), which is
authorised and regulated in the United Kingdom by the FCA, is acting as sole
Rule 3 adviser, financial adviser and corporate broker exclusively for
Hipgnosis and no-one else in connection with the matters described in this
Announcement and will not be responsible to anyone other than Hipgnosis for
providing the protections afforded to clients of Singer Capital Markets nor
for providing advice in connection with the matters referred to herein.
This Announcement is for information purposes only and is not intended to and
does not constitute, or form part of, an offer to sell or an invitation to
purchase any securities or a solicitation of an offer to buy, otherwise
acquire, subscribe for, sell or otherwise dispose of any securities pursuant
to the Acquisition or otherwise, nor shall there be any purchase, sale,
issuance or exchange of securities or such solicitation in any jurisdiction in
which such offer, invitation, solicitation, purchase, sale, issuance or
exchange is unlawful. The Acquisition will be made solely by means of the
Scheme Document (or, if the Acquisition is implemented by way of a Takeover
Offer, any document by which the Takeover Offer is made) and the accompanying
Forms of Proxy (or forms of acceptance, if applicable), which will contain the
full terms and conditions of the Acquisition, including details of how to vote
in respect of the resolutions proposed in connection with the Acquisition. Any
vote, approval, decision in respect of, or other response to, the Acquisition
should be made only on the basis of the information contained in the Scheme
Document (or any other document by which the Acquisition is made by way of a
Takeover Offer).
The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them, and the
release of this Announcement shall not give rise to any implication that there
has been no change in the facts set out in this Announcement since such date.
This Announcement does not constitute a prospectus or prospectus equivalent
document.
Hipgnosis Shareholders should not make any investment decision in relation to
the Acquisition except on the basis of the Scheme Document (or any other
document by which the Acquisition is made by way of a Takeover Offer).
Hipgnosis and Bidco urge Hipgnosis Shareholders to read the whole of the
Scheme Document when it becomes available because it will contain important
information relating to the Acquisition.
No person should construe the contents of this Announcement as legal,
financial or tax advice. If you are in any doubt about the contents of this
Announcement or the action you should take, you are recommended to seek your
own independent financial advice immediately from your stockbroker, bank
manager, solicitor, accountant or from an independent financial adviser duly
authorised under FSMA if you are resident in the United Kingdom, or another
appropriately authorised independent financial adviser, if you are in a
territory outside the United Kingdom.
Overseas Shareholders
This Announcement has been prepared for the purpose of complying with Guernsey
law, English law, the Takeover Code, the Market Abuse Regulation, the
Disclosure Guidance and Transparency Rules and the Listing Rules and
information disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with the laws
of jurisdictions outside the United Kingdom or Guernsey. Nothing in this
Announcement should be relied on for any other purpose.
The release, publication or distribution of this Announcement in or into,
jurisdictions other than the United Kingdom or Guernsey may be restricted by
the laws and/or regulations of those jurisdictions and therefore persons into
whose possession this Announcement comes who are subject to the laws and/or
regulations of any jurisdiction other than the United Kingdom or Guernsey
should inform themselves about and observe any such applicable laws and/or
regulations in their jurisdiction. In particular, the ability of persons who
are not resident in the United Kingdom or Guernsey to vote their Scheme Shares
or Hipgnosis Shares (as applicable) with respect to the Scheme at the Court
Meeting or the General Meeting, or to appoint another person as proxy to vote
at the Court Meeting or the General Meeting on their behalf, may be affected
by the laws of the relevant jurisdiction in which they are located. Further
details in relation to Overseas Shareholders will be contained in the Scheme
Document. Any failure to comply with any such restrictions may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person.
Unless otherwise determined by Hipgnosis or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no person may
vote in favour of the Scheme by any such use, means, instrumentality or form
from within a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that jurisdiction. Accordingly,
copies of this Announcement and all documents relating to the Acquisition are
not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction, and persons
receiving this Announcement and all documents relating to the Acquisition
(including custodians, nominees and trustees) must not mail or otherwise
distribute or send them in, into or from such jurisdictions where to do so
would violate the laws in that jurisdiction. If the Acquisition is implemented
by a Takeover Offer (unless otherwise permitted by applicable law or
regulation), the Takeover Offer may not be made, directly or indirectly, in or
into or by use of the mails or any other means or instrumentality (including,
without limitation, facsimile, email or other electronic transmission, telex
or telephone) of interstate or foreign commerce of, or any facility of a
national state or other securities exchange, of any Restricted Jurisdiction
and the Takeover Offer will not be capable of acceptance by any such use,
means, instrumentality or facilities or from or within any Restricted
Jurisdiction.
Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.
Additional information for US investors
Hipgnosis Shareholders in the United States should note that the Acquisition
relates to the securities of a Guernsey company with a listing on the London
Stock Exchange and is proposed to be effected by means of a scheme of
arrangement provided for under, and governed by, the Companies Law. This
Announcement, the Scheme Document and certain other documents relating to the
Acquisition have been or will be prepared in accordance with Guernsey law,
English law, the Takeover Code and UK disclosure requirements, format and
style, all of which differ from those in the United States. A transaction
effected by means of a scheme of arrangement is not subject to the tender
offer rules or the proxy solicitation rules under the US Exchange Act.
Accordingly, the Acquisition is subject to the procedural and disclosure
requirements and practices applicable to a scheme of arrangement involving a
target company organised in Guernsey and listed on the London Stock Exchange,
which differ from the procedural and disclosure requirements of the United
States tender offer rules and proxy solicitation rules under the US Exchange
Act. If, in the future, Bidco exercises the right to implement the Acquisition
by way of a Takeover Offer and determines to extend the offer into the United
States, the Acquisition will be made in compliance with applicable United
States laws and regulations. Such Takeover Offer would be made by Bidco and no
one else.
The financial information that is included in this Announcement or that may be
included in the Scheme Document, or any other documents relating to the
Acquisition, has been or will be prepared in accordance with IFRS and may not
be comparable to financial statements of companies in the United States or
other companies whose financial statements are prepared in accordance with US
generally accepted accounting principles.
The Hipgnosis Shares have not been approved or disapproved by the Securities
Exchange Commission or any US state securities commission, nor have any such
authorities passed judgment upon the fairness or the merits of the Acquisition
or determined if this Announcement is accurate or complete. Any representation
to the contrary is a criminal offence in the United States.
US holders of Hipgnosis Shares should also be aware that the transaction
contemplated herein may have tax consequences in the United States and that
such consequences, if any, are not described herein. US holders of Hipgnosis
Shares are urged to consult with independent professional advisors regarding
the legal, tax and financial consequences of the Acquisition applicable to
them.
It may be difficult for US holders of Hipgnosis Shares to enforce their rights
and claims arising out of US federal securities laws, since Hipgnosis is
incorporated outside the United States, and its officers and directors may be
residents of, and some or all of their assets may be located in, countries
other than the United States. US holders of Hipgnosis Shares may have
difficulty effecting service of process within the United States upon those
persons or recovering against judgments of US courts, including judgments
based upon the civil liability provisions of the US federal securities laws.
US holders may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of US securities laws. Further, it
may be difficult to compel a non-US company and its affiliates to subject
themselves to a US court's judgement.
In accordance with normal practice in the UK and Guernsey and consistent with
Rule 14e-5(b) of the US Exchange Act, Bidco, certain affiliated companies and
their nominees or brokers (acting as agents) may make certain purchases of, or
arrangements to purchase, shares in Hipgnosis outside the United States, other
than pursuant to the Acquisition, until the date on which the Acquisition
and/or Scheme becomes Effective, lapses or is otherwise withdrawn. If such
purchases or arrangements to purchase were to be made they would occur either
in the open market at prevailing prices or in private transactions at
negotiated prices and comply with applicable law, including the US Exchange
Act. Any information about such purchases or arrangements to purchase will be
disclosed as required in the United Kingdom, will be reported to a Regulatory
Information Service and will be available on the London Stock Exchange website
at www.londonstockexchange.com.
Further details in relation to US investors will be contained in the Scheme
Document.
Forward-looking statements
This Announcement (including information incorporated by reference in this
Announcement), oral statements made regarding the Acquisition, and other
information published by Concord, Apollo, Bidco or Hipgnosis contain
statements about Bidco and Hipgnosis and/or the Wider Bidco Group that are or
may be deemed to be forward-looking statements. All statements other than
statements of historical facts included in this Announcement, may be
forward-looking statements. Without limitation, any statements preceded or
followed by or that include the words "targets", "plans", "believes",
"expects", "aims", "intends", "will", "may", "anticipates", "estimates",
"hopes", "projects", "continue", "schedule" or words or terms of similar
substance or the negative thereof, are forward-looking statements.
Forward-looking statements include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion
and growth of Concord's, Apollo's or Hipgnosis' or the Wider Bidco Group's
operations and potential synergies resulting from the Acquisition; and (iii)
the effects of government regulation on Concord's, Apollo's or Hipgnosis' or
the Wider Bidco Group's business.
These forward-looking statements are not based on historical fact and are not
guarantees of future performance. By their nature, such forward-looking
statements involve known and unknown risks and uncertainties that could
significantly affect expected results and are based on certain key
assumptions. Many factors could cause actual results to differ materially from
those projected or implied in any forward-looking statements. Many of these
risks and uncertainties relate to factors that are beyond the entities'
ability to control or estimate precisely. These factors include, but are not
limited to, the satisfaction of or failure to satisfy all or any of the
conditions to the Acquisition, as well as additional factors, such as changes
in political and economic conditions, changes in the level of capital
investment, retention of key employees, changes in customer habits, success of
business and operating initiatives and restructuring objectives, the impact of
any acquisitions or similar transactions, changes in customers' strategies and
stability, competitive product and pricing measures, changes in the regulatory
environment, fluctuations of interest and exchange rates and the outcome of
any litigation.
Neither Bidco or Hipgnosis, nor any of their respective associates or
directors, officers, employees or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed or implied
in any forward-looking statements in this Announcement will actually occur.
Due to such uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of the date
of this Announcement. All subsequent oral or written forward-looking
statements attributable to Bidco or Hipgnosis or any of their respective
members, directors, officers, employees or advisers or any persons acting on
their behalf are expressly qualified in their entirety by the cautionary
statement above. Bidco and Hipgnosis expressly disclaim any obligation to
update any forward-looking or other statements contained in this Announcement,
except as required by applicable law or by the rules of any competent
regulatory authority, whether as a result of new information, future events or
otherwise.
Disclosure requirements of the City Code on Takeovers and Mergers
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 p.m. (London time) on the 10th
Business Day (as defined in the Takeover Code) following the commencement of
the Offer Period and, if appropriate, by no later than 3.30 p.m. (London time)
on the 10th Business Day (as defined in the Takeover Code) following the
announcement in which any securities exchange offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree company or
of a securities exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant securities of
each of (i) the offeree company and (ii) any securities exchange offeror(s),
save to the extent that these details have previously been disclosed under
Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be
made by no later than 3.30 p.m. (London time) on the Business Day (as defined
in the Takeover Code) following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4 of the Takeover Code).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Right to switch to a Takeover Offer
Bidco reserves the right to elect, with the consent of the Panel, to implement
the Acquisition by way of a Takeover Offer for the entire issued and to be
issued ordinary share capital of Hipgnosis as an alternative to the Scheme. In
such an event, the Takeover Offer will be implemented on the same terms or, if
Bidco so decides, on such other terms being no less favourable (subject to
appropriate amendments), so far as applicable, as those which would apply to
the Scheme and subject to the amendment referred to in Part B of Appendix 1 to
this Announcement.
Publication of this Announcement on websites and availability of hard copies
A copy of this Announcement and the documents required to be published
pursuant to Rules 26.1 and 26.2 of the Takeover Code will be available, free
of charge, subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on
https://communications.singercm.com/p/4UWI-ETV/recommended-cash-offer-hipgnosis
and Bidco's website at www.projectchorus.com by no later than 12.00 p.m. on
the Business Day following the date of this Announcement.
In accordance with Rule 30.3 of the Takeover Code, Hipgnosis Shareholders and
persons with information rights may request a hard copy of this Announcement
by contacting Hipgnosis' registrars, Computershare Investor Services
(Guernsey) Limited, or by calling 0370 707 4040 or from overseas +44 370 707
4040. Calls are charged at the standard geographical rate and will vary by
provider. Calls outside the United Kingdom or Guernsey will be charged at the
applicable international rate. Lines are open between 8.30 a.m. to 5.30 p.m.
(London time), Monday to Friday (except public holidays in the UK and
Guernsey). Please note that Computershare Investor Services (Guernsey) Limited
cannot provide any financial, legal or tax advice. Calls may be recorded and
monitored for security and training purposes. For persons who receive a copy
of this Announcement in electronic form or via a website notification, a hard
copy of this Announcement will not be sent unless so requested. Such persons
may also request that all future documents, announcements and information to
be sent to them in relation to the Acquisition should be in hard copy form.
Information relating to Hipgnosis Shareholders
Please be aware that addresses, electronic addresses and certain information
provided by Hipgnosis Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Hipgnosis may be
provided to Bidco during the Offer Period as required under Section 4 of
Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Rounding
Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an exact arithmetic aggregation of the figures that precede
them.
Rule 2.9 of the Takeover Code
For the purposes of Rule 2.9 of the Takeover Code, Hipgnosis confirms that, as
at the Latest Practicable Date, it had 1,209,214,286 ordinary shares of no par
value in issue and admitted to trading on the London Stock Exchange and
2,000,000 shares held in treasury. The ISIN of the Hipgnosis Shares is
GG00BFYT9H72.
APPENDIX 1
CONDITIONS to AND CERTAIN FURTHER TERMS OF THE acquisition
Part A
Conditions to the Scheme and the acquisition
Long Stop Date
1. The Acquisition will be conditional upon the Scheme becoming
unconditional and becoming Effective, subject to the provisions of the
Takeover Code, by no later than 11.59 p.m. on the Long Stop Date or such later
date as Bidco and Hipgnosis may, with the consent of the Panel, agree and (if
required) the Court may allow.
Scheme approval
2. The Scheme will be conditional upon:
(a)
(i) its approval by a majority in number representing 75 per cent. or more of the voting rights of the Scheme Shareholders (or the relevant class or classes thereof) who are on the register of members of Hipgnosis at the Scheme Voting Record Time and who are present and vote, whether in person or by proxy, at the Court Meeting, and at any separate class meeting which may be required by the Court, or, in each case, at any adjournment or postponement of any such meeting; and
(ii) the Court Meeting and any separate class meeting which may be required by the Court or any adjournment or postponement of any such meeting being held on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document (or such later date (if any) as may be agreed by Bidco and Hipgnosis with the consent of the Panel and (if required) the Court may allow);
(b)
(i) all resolutions necessary to approve and implement the Scheme, as set out in the notice of the General Meeting, being duly passed by the requisite majority or majorities of Hipgnosis Shareholders at the General Meeting (or at any adjournment or postponement thereof); and
(ii) the General Meeting (or any adjournment or postponement of that meeting) being held on or before the 22nd day after the expected date of the General Meeting to be set out in the Scheme Document (or such later date (if any) as may be agreed by Bidco and Hipgnosis with the consent of the Panel and (if required) the Court may allow);
(c)
(i) the sanction of the Scheme by the Court (with or without modification, but subject to any modification being on terms acceptable to Bidco and Hipgnosis); and
(ii) the Court Hearing being held on or before the 22nd day after the expected date of the Court Hearing to be set out either in (X) the Scheme Document (or such later date (if any) as may be agreed by Bidco and Hipgnosis with the consent of the Panel and (if required) that the Court may allow); or (Y) in the event that such expected date remains unknown at the time of publication of the Scheme Document and the Scheme Document identifies any date as indicative only, in any update announcement issued through a Regulatory Information Service (or such later date (if any) as may be agreed by Bidco and Hipgnosis, with the consent of the Panel and (if required) that the Court may allow).
Anti-trust and regulatory clearances
3. In addition, subject to: (i) the terms of Part B of this Appendix 1,
and (ii) the requirements of the Panel, the Acquisition will be conditional
upon the following Conditions and, accordingly, the necessary actions to make
the Scheme Effective will not be taken unless the following Conditions (as
amended if appropriate) have been satisfied or, where relevant, waived prior
to the Scheme being sanctioned by the Court:
European Union
(a) to the extent that the Acquisition constitutes a concentration that is subject to review by the European Commission under Council Regulation (EC) No. 139/2004 (the "EC Merger Regulation"), the European Commission having adopted a decision to allow closing of the Acquisition; or
(b) to the extent that all or part of the Acquisition falls within the exclusive competence of or is referred by the European Commission to the relevant Governmental Body of one or more member countries of the European Economic Area, such relevant Governmental Body(ies) having issued a final decision or decisions which satisfies (or together satisfy) Condition 3(a) above (that clause being interpreted mutandis mutatis);
United Kingdom
(c) insofar as the Competition and Markets Authority ("CMA") requests information in relation the Acquisition pursuant to s.5 of the Enterprise Act 2002 (the "Enterprise Act") or in response to a briefing paper, the CMA shall have confirmed in writing that it has no further questions in relation to the Acquisition, and at the time all other conditions to the Acquisition are satisfied shall not have raised any outstanding questions or otherwise indicated that it is considering whether to open an investigation; or otherwise cleared the Acquisition pursuant to the Enterprise Act.
Notifications, waiting periods and Authorisations
4. In addition, and save in respect of Conditions 3(a) to 3(c) above,
subject to: (i) the terms of Part B of this Appendix 1, and (ii) the
requirements of the Panel, the Acquisition will be conditional upon the
following Conditions and, accordingly, the necessary actions to make the
Scheme Effective will not be taken unless the following Conditions (as amended
if appropriate) have been satisfied or, where relevant, waived prior to the
Scheme being sanctioned by the Court:
(a) all material notifications, filings and/or applications which are necessary under applicable legislation or regulation having been made, all necessary waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory or regulatory obligations in any relevant jurisdiction having been complied with, in each case in connection with the Acquisition or the acquisition, or proposed acquisition, of any shares or other securities (or the equivalent) in, or control of, Hipgnosis or any other member of the Wider Hipgnosis Group by any member of the Wider Bidco Group;
(b) all Authorisations which are necessary in any relevant jurisdiction for or in respect of the Acquisition (or its implementation) or the acquisition, or proposed acquisition, of any shares or other securities (or the equivalent) in, or control of, Hipgnosis or any other member of the Wider Hipgnosis Group by Bidco or any member of the Wider Bidco Group, having been obtained, in terms and in a form reasonably satisfactory to Bidco from all appropriate Third Parties or from any persons or bodies with whom any member of the Wider Bidco Group or any other member of the Wider Hipgnosis Group has entered into contractual arrangements, and all such Authorisations, together with all Authorisations necessary for any member of the Wider Hipgnosis Group to carry on its business, remaining in full force and effect and all filings necessary for such purpose having been made, and there being no notice or other intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same;
General regulatory
(c) no Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and, in each case, not having withdrawn the same), or having required any action to be taken, or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision or order or change to published practice, and there not continuing to be outstanding any statue, regulation, decision or order or having taken any other action or step which would or might reasonably be expected to:
(i) require, prevent or materially delay any divestiture, or alter the terms envisaged for any proposed divestiture, by any member of the Wider Bidco Group or by any member of the Wider Hipgnosis Group of all or any part of their respective businesses, assets or property, or impose any limitation on the ability of all or any of them to conduct their respective businesses (or any part thereof) or to own, control or manage any of their assets or property (or any part thereof);
(ii) impose any material limitation on, or result in a material delay in, the ability of any member of the Wider Bidco Group, directly or indirectly, to acquire, hold or to exercise effectively all or any rights of ownership in respect of shares or other securities (or the equivalent) in any member of the Wider Hipgnosis Group or the Wider Bidco Group or on the ability of any member of the Wider Hipgnosis Group or any member of the Wider Bidco Group, directly or indirectly, to hold or exercise effectively all or any rights of ownership in respect of shares or other securities (or the equivalent) in, or to exercise voting or management control over, any such member;
(iii) otherwise materially adversely affect any or all of the business, assets, profits, financial or trading position, or prospects of any member of the Wider Bidco Group or any member of the Wider Hipgnosis Group;
(iv) result in any member of the Wider Bidco Group ceasing to be able to carry on business under any name under which it presently carries on business;
(v) make the Acquisition, its implementation, or the acquisition or the proposed acquisition of any shares or other securities (or the equivalent) in, or control or management of Hipgnosis or any member of the Wider Hipgnosis Group by Bidco or any member of the Wider Bidco Group void, unenforceable and/or illegal under the laws of any jurisdiction, or otherwise, directly or indirectly prevent or prohibit, restrict, restrain, materially delay or otherwise materially interfere with the implementation of the same, or impose additional adverse conditions or obligations with respect to, or otherwise challenge, impede, interfere with the Acquisition (or its implementation) or such acquisition, or require material amendment to the terms of the Acquisition or the acquisition of any shares or other securities (or the equivalent) in, or control or management of, Hipgnosis by any member of the Wider Bidco Group;
(vi) require, prevent or materially delay any divestiture, or alter the terms envisaged for any proposed divestiture, by any member of the Wider Bidco Group of any shares or other securities (or the equivalent) in Hipgnosis or any member of the Wider Hipgnosis Group;
(vii) require (save as envisaged in the implementation of the Acquisition or by Part XVIII of the Companies Law) any member of the Wider Bidco Group or of the Hipgnosis Group to acquire, or to offer to acquire, any shares or other securities (or the equivalent) in, or any interest in any of the assets owned by, any member of the Wider Bidco Group or any member of the Wider Hipgnosis Group owned by any Third Party, or to sell or offer to sell any shares or other securities (or their equivalent) or any interest in any of the assets owned by any member of the Wider Bidco Group or the Wider Hipgnosis Group; or
(viii) impose any limitation on the ability of any member of the Wider Bidco Group, or any member of the Wider Hipgnosis Group, to conduct, integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the Wider Bidco Group and/or the Wider Hipgnosis Group (as applicable),
and all applicable waiting and other time periods (including any extensions thereof) during which any such antitrust regulator or Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any relevant jurisdiction in respect of the Acquisition or the acquisition of any Hipgnosis Shares or otherwise intervene having expired, lapsed or been terminated (as the case may be);
Certain matters arising as a result of any arrangement, agreement, etc
(d) except as Disclosed, there being no provision of any arrangement, agreement, lease, licence, permit, franchise or other instrument to which any member of the Wider Hipgnosis Group is a party, or by or to which any such member, or any of its assets is or may be bound, entitled or subject to, or any event or circumstance, which, in each case as a consequence of the Acquisition (or its implementation) or the proposed acquisition by Bidco or any member of the Wider Bidco Group, or otherwise of any shares or other securities (or the equivalent) in, or control or management of, Hipgnosis or any member of the Wider Hipgnosis Group, would or might reasonably be expected to result in, in any case to an extent which is or would be material in the context of the Wider Hipgnosis Group taken as a whole or in the context of the Acquisition:
(i) any monies borrowed by, or any other indebtedness or liabilities, actual or contingent of, or any grant available to, any member of the Wider Hipgnosis Group being or becoming repayable or capable of being declared repayable immediately or before its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited, or being capable of becoming or being withdrawn or inhibited;
(ii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of any member of the Wider Hipgnosis Group, or any such mortgage, charge, encumbrance or other security interest (wherever and whenever created, arising or having arisen) being enforced or becoming enforceable;
(iii) any arrangement, agreement, lease, licence, permit, franchise or other instrument, or the rights, liabilities, obligations or interests of any member of the Wider Hipgnosis Group thereunder, being, terminated, adversely modified or adversely affected or any adverse action being taken or arising thereunder or any onerous obligation or liability arising thereunder;
(iv) any asset or interest of any member of the Wider Hipgnosis Group or any asset the use of which is enjoyed by any member of the Wider Hipgnosis Group being or falling to be disposed of or charged or ceasing to be available to any member of the Wider Hipgnosis Group or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any member of the Wider Hipgnosis Group otherwise than in the ordinary course of business;
(v) the rights, liabilities, obligations or interests of any member of the Wider Hipgnosis Group in, or the business of any such member with, any person, firm, company or body (or any arrangement or arrangements relating to any such interest or business) being terminated, adversely modified or adversely affected other than as directed, requested and/or required by Bidco;
(vi) the value of, or the financial or trading position or profits of, any member of the Wider Hipgnosis Group being prejudiced or adversely affected;
(vii) the creation or acceleration of any liability (actual or contingent) by any member of the Wider Hipgnosis Group, other than trade creditors or other liabilities incurred in the ordinary course of business or in connection with the Acquisition; or
(viii) any member of the Wider Hipgnosis Group being required to acquire or repay any shares in and/or indebtedness of any member of the Wider Hipgnosis Group owned by or owed to any Third Party;
Certain events occurring since 31 March 2023
(e) except as Disclosed, no member of the Wider Hipgnosis Group having since 31 March 2023:
(i) issued or agreed to issue, or authorised or proposed or announced its intention to authorise or propose the issue of, additional shares of any class, or securities (or the equivalent) or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities (or the equivalent) or convertible securities, or transferred or sold or agreed to transfer or sell or authorised or proposed the transfer or sale of Hipgnosis Shares out of treasury (except, where relevant, as between Hipgnosis and wholly-owned subsidiaries of Hipgnosis or between the wholly-owned subsidiaries of Hipgnosis);
(ii) recommended, declared, paid or made, or proposed to recommend, declare, pay or make, any bonus, dividend or other distribution (whether payable in cash or otherwise) other than the quarterly dividends paid on 28 April 2023 and 28 July 2023 or any dividends or other distributions (whether payable in cash or otherwise) lawfully paid or made by any wholly-owned subsidiary of Hipgnosis to Hipgnosis or any of their respective wholly-owned subsidiaries;
(iii) except for transactions between Hipgnosis and its respective wholly-owned subsidiaries, or between such wholly-owned subsidiaries of Hipgnosis, implemented, effected, authorised or proposed, or announced its intention to implement, effect, authorise or propose, any acquisition of any body corporate, partnership or business, merger, demerger, reconstruction, amalgamation, scheme, commitment or offer or disposal of assets or shares or loan capital (or the equivalent thereof);
(iv) undertaken:
(A) a conversion under Part V of the Companies Law;
(B) an amalgamation under Part VI of the Companies Law;
(C) a migration under Part VII of the Companies Law; or
(D) an arrangement or reconstruction (other than the Scheme) under Part VIII of the Companies Law;
(v) except for transactions between Hipgnosis and its respective wholly-owned subsidiaries, or between such wholly-owned subsidiaries of Hipgnosis, acquired or disposed of or transferred, mortgaged, charged or created any security interest over any material asset (including shares in any undertaking and trade investments) or any right, title or interest in any asset, or authorised, proposed or announced any intention to do the same;
(vi) except for transactions between Hipgnosis and its respective wholly-owned subsidiaries, or between such wholly-owned subsidiaries of Hipgnosis, issued, authorised or proposed or announced an intention to authorise or propose the issue of, or made any change in or to the terms of, any debentures or other trade credit incurred in the ordinary course of business, or become subject to any contingent liability or incurred or increased any indebtedness or other liability (actual or contingent), which is material in the context of the Wider Hipgnosis Group taken as a whole;
(vii) entered into, varied, authorised, proposed, or announced an intention to enter into or vary, any contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, unusual or onerous nature or magnitude, or which is or which involves or could involve an obligation of a nature or magnitude which is or could reasonably be expected to be restrictive on the business of any member of the Wider Hipgnosis Group which, taken together with any other such transaction, arrangement, agreement, contract or commitment, is material in the context of the Wider Hipgnosis Group taken as a whole;
(viii) entered into, or materially varied the terms of, or made any offer (which remains open for acceptance) to enter into or vary the terms of, any contract, service agreement, commitment or arrangement with any director of any member of the Wider Hipgnosis Group;
(ix) purchased, redeemed or repaid, or announced any proposal to purchase, redeem or repay, any of its own shares or other securities (or the equivalent) or reduced or made any other change to any part of its share capital;
(x) except in the ordinary course of business, waived, compromised or settled any claim which is material in the context of the Wider Hipgnosis Group taken as a whole;
(xi) terminated or varied the terms of any agreement or arrangement between any member of the Wider Hipgnosis Group and any other person in a manner which would, or might reasonably be expected to, have a material adverse effect on the financial position or prospects of the Wider Hipgnosis Group taken as a whole other than as directed, required and/or requested by Bidco;
(xii) made any material alteration to its memorandum or articles of incorporation or other incorporation documents (in each case, other than in connection with the implementation of the Acquisition);
(xiii) put in place any pension schemes for its directors or their dependants, or made or agreed or consented to any change to:
(A) the terms of the trust deeds and rules constituting the pension scheme(s) (if any) established by any member of the Wider Hipgnosis Group for its directors or their dependants;
(B) the contributions payable to any such scheme(s) or to the benefits which accrue, or to the pensions which are payable, thereunder;
(C) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or
(D) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued, made, agreed or consented to;
(xiv) been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;
(xv) (other than in respect of a member of the Wider Hipgnosis Group which is dormant and was solvent at the relevant time) taken or proposed any steps or corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all or any of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed;
(xvi) except for transactions between Hipgnosis and its respective wholly-owned subsidiaries, or between such wholly-owned subsidiaries, made, authorised, proposed or announced an intention to propose any change in its loan capital;
(xvii) entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of business or corporate entities;
(xviii) entered into any agreement, arrangement, commitment or contract or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced an intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition 4(e); or
(xix) taken (or agreed or proposed to take) any action which requires, or would require, the consent of the Panel or the approval of Hipgnosis Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Takeover Code;
No adverse change, litigation, regulatory enquiry or similar
(f) since 31 March 2023, except as Disclosed:
(i) no adverse change or deterioration having arisen in the business, assets, financial or trading position or profits or prospects or operational performance of the Wider Hipgnosis Group taken as a whole, which in any case is material in the context of the Wider Hipgnosis Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened, announced or instituted by or against or remaining outstanding against (and in each case not having been withdrawn and/or resolved) or in respect of, any member of the Wider Hipgnosis Group or to which any member of the Wider Hipgnosis Group is or may become a party (whether as claimant, defendant or otherwise) having been threatened, announced, instituted or remaining outstanding by, against or in respect of, any member of the Wider Hipgnosis Group, which in any case is or might reasonably be expected to have a material adverse effect on the Wider Hipgnosis Group taken as a whole;
(iii) no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Wider Hipgnosis Group having been threatened, announced or instituted or remaining outstanding by, against (and in each case not having been withdrawn and/or resolved) or in respect of any member of the Wider Hipgnosis Group, which in any case is or might reasonably be expected to have a material adverse effect on the Wider Hipgnosis Group taken as a whole;
(iv) no contingent or other liability having arisen, or become apparent to any member of the Wider Bidco Group, or increased which is reasonably likely to affect adversely the business, assets, financial or trading position or profits or prospects of any member of the Wider Hipgnosis Group, which in any case is material in the context of the Wider Hipgnosis Group taken as a whole;
(v) no claim being made and no circumstance having arisen which might reasonably be expected to lead to a claim being made under the insurance of any member of the Wider Hipgnosis Group where such claim would not be covered by such insurance and which in any case is material in the context of the Wider Hipgnosis Group taken as a whole;
(vi) no member of the Wider Hipgnosis Group having conducted its business in breach of any applicable laws and regulations which is material in the context of the Wider Hipgnosis Group taken as a whole; and
(vii) no steps having been taken and no omissions having been made which are reasonably likely to result in the withdrawal, cancellation, termination or modification of any licence, permit or consent held by any member of the Wider Hipgnosis Group which is necessary for the proper carrying on of its business and which in any case is material in the context of the Wider Hipgnosis Group taken as a whole;
No discovery of certain matters regarding information, liabilities and
environmental issues
(g) except as Disclosed, Bidco not having discovered that (in each case to an extent which is or could be material in the context of the Wider Hipgnosis Group taken as a whole or material in the context of the Acquisition):
(i) any financial, business or other information concerning the Wider Hipgnosis Group publicly announced before the date of this Announcement by or on behalf of any member of the Wider Hipgnosis Group is materially misleading, contains any material misrepresentation of fact, or omits to state a fact necessary to make any information contained therein not misleading;
(ii) any member of the Wider Hipgnosis Group is subject to any liability, contingent or otherwise;
(iii) any information which affects the import of any information disclosed at any time by or on behalf of any member of the Wider Hipgnosis Group;
(iv) any past or present member of the Wider Hipgnosis Group has failed to comply with any applicable legislation or regulations or common law of any jurisdiction or any notice, order or requirement of any Third Party or any Authorisations relating to the use, treatment, storage, carriage, disposal, discharge, spillage, release, leak or emission of any waste or hazardous or harmful substance or any substance likely to impair the environment (including property) or harm human or animal health or otherwise relating to environmental matters or the health and safety of humans, which non-compliance would be likely to give rise to any material liability including any penalty for non-compliance (whether actual or contingent) on the part of any member of the Wider Hipgnosis Group;
(v) there is or has been a disposal, discharge, spillage, accumulation, release, leak, emission or the migration, production, supply, treatment, storage, transport or use of any waste or hazardous or harmful substance or any substance likely to impair the environment (including any property) or harm human or animal health which (whether or not giving rise to non-compliance with any law or regulation), would be likely to give rise to any material liability (whether actual or contingent) on the part of any member of the Wider Hipgnosis Group; or
(vi) there is or is reasonably likely to be any obligation or liability (whether actual or contingent) or requirement to make good, remediate, repair, reinstate or clean up any property or controlled waters, currently or previously owned, occupied, operated or made use of or controlled by any past or present member of the Wider Hipgnosis Group (or on its behalf), or in which any such member may have or previously have had or be deemed to have had an interest, under any environmental legislation, common law, regulation, notice, circular, Authorisation or order of any Third Party in any jurisdiction or to contribute to the cost thereof or associated therewith or indemnify any person in relation thereto.
Anti-corruption, sanctions and criminal property
(h) save as Disclosed, Bidco not having discovered that:
(i) any past or present member, director, officer or employee of the Wider Hipgnosis Group is or has at any time engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977, the Prevention of Corruption (Bailiwick of Guernsey) Law 2003 or any other anti-corruption legislation or anti-bribery law, rule or regulation applicable to the Wider Hipgnosis Group or any other law, rule or regulation concerning improper payments or kickbacks; or any person that performs or has performed services for or on behalf of the Wider Hipgnosis Group is or has at any time engaged in any activity, practice or conduct in connection with the performance of such services which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977, the Prevention of Corruption (Bailiwick of Guernsey) Law 2003 or any other anti-corruption legislation or anti-bribery law, rule or regulation or any other law, rule or regulation concerning improper payments or kickbacks;
(ii) any asset of any member of the Wider Hipgnosis Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition) or proceeds of crime under any other applicable law, rule, or regulation concerning money laundering or proceeds of crime or any member of the Wider Hipgnosis Group is found to have engaged in activities constituting money laundering;
(iii) any past or present member, director, officer or employee of the Wider Hipgnosis Group, or any other person for whom any such person may be liable or responsible, is or has engaged in any conduct or business which would violate any economic sanctions or dealt with, made any investments in, made any funds or assets available to or received any funds or assets from: (a) any government, entity or individual in respect of which US, UK or European Union persons, or persons operating in those territories, are prohibited from engaging in activities or doing business, or from receiving or making available funds or economic resources, by applicable US or European Union laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control or HM Treasury & Customs in the United Kingdom; or (b) any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the UK, the European Union or any of their respective member states;
(iv) any past or present member, director, officer or employee of the Wider Hipgnosis Group, or any other person for whom any such person may be liable or responsible:
(A) has engaged in conduct which would violate any relevant anti-terrorism laws, rules, or regulations, including but not limited to the U.S. Anti-Terrorism Act;
(B) has engaged in conduct which would violate any relevant anti-boycott law, rule, or regulation or any applicable export controls, including but not limited to the Export Administration Regulations administered and enforced by the U.S. Department of Commerce or the International Traffic in Arms Regulations administered and enforced by the U.S. Department of State;
(C) has engaged in conduct which would violate any relevant laws, rules, or regulations concerning human rights, including but not limited to any law, rule, or regulation concerning false imprisonment, torture or other cruel and unusual punishment, or child labour;
(D) is debarred or otherwise rendered ineligible to bid for or to perform contracts for or with any government, governmental instrumentality, or international organisation or found to have violated any applicable law, rule, or regulation concerning government contracting or public procurement; or
(v) any member of the Wider Hipgnosis Group has or is engaged in any transaction which would cause Bidco or any member of the Wider Bidco Group to be in breach of any applicable law or regulation upon its acquisition of Hipgnosis, including but not limited to the economic sanctions of the United States Office of Foreign Assets Control or HM Treasury & Customs in the United Kingdom, or any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the UK, the European Union or any of its member states.
Part B
certain Further terms of the Acquisition
1. Conditions 2(a), 2(b), 3(a) to 3(c) (inclusive) and 4(a) to 4(h)
(inclusive) of Part A above must be fulfilled or (if capable of waiver) waived
by no later than 11.59 p.m. (London time) on the date immediately preceding
the date of the Court Hearing (or such later date as Bidco, Hipgnosis, the
Panel and, if required, the Court may allow), failing which the Acquisition
will lapse, or if the Acquisition is implemented by way of Takeover Offer, no
later than as permitted by the Panel.
2. To the extent permitted by law and subject to the requirements of the
Panel in accordance with the Takeover Code, Bidco reserves the right, in its
sole discretion, to waive in whole or in part all or any of the Conditions set
out in Part A, above, and to proceed with the Court Hearing prior to the
fulfilment, satisfaction or waiver of any of the Conditions, except Conditions
1, 2(a)(i), 2(b)(i) and 2(c)(i) which cannot be waived. If any of Conditions
2(a)(ii), 2(b)(ii) or 2(c)(ii) is not satisfied by the relevant deadline
specified in the relevant Condition, Bidco will make an announcement by 8.00
a.m.(London time) on the Business Day following such deadline confirming
whether it has invoked the relevant Condition, waived the relevant deadlines
or agreed with Hipgnosis to extend the relevant deadline.
3. The Acquisition will lapse if the Scheme does not become Effective by
no later than 11.59 p.m. (London time) on the Long Stop Date.
4. If Bidco is required by the Panel to make a Takeover Offer for
Hipgnosis Shares under the provisions of Rule 9 of the Takeover Code, Bidco
may make such alterations to any of the above Conditions and terms of the
Acquisition as are necessary to comply with the provisions of that Rule.
5. Bidco will be under no obligation to waive (if capable of waiver), to
determine to be or remain satisfied, or to treat as fulfilled any of the
Conditions by a date earlier than the latest date for the fulfilment or waiver
of that Condition notwithstanding that the other Conditions of the Acquisition
may, at such earlier date, have been waived or fulfilled and that there are,
at such earlier date, no circumstances indicating that any of such Conditions
may not be capable of satisfaction or fulfilment.
6. The Hipgnosis Shares to be acquired pursuant to the Acquisition will be
acquired fully paid and free from all liens, equities, charges, encumbrances,
options, rights of pre-emption and any other third party rights and interests
of any nature and together with all rights now or hereafter attaching or
accruing to them, including, without limitation, voting rights and the right
to receive and retain in full all dividends and other distributions (if any)
declared, made or paid, or any other return of capital (whether by reduction
of share capital or share premium account or otherwise) made, on or after the
date of this Announcement.
7. Bidco reserves the right (without prejudice to any right of Bidco to
invoke Condition 4(e)(ii) in Part A of this Appendix 1) to reduce the
consideration payable by the amount per Hipgnosis Share of any such subsequent
dividend, distribution or other return of value, in which case: (a) any
reference in this Announcement or in the Scheme Document to the consideration
payable for the Hipgnosis Shares will be deemed to be a reference to the
consideration payable as so reduced; and (b) the relevant eligible Hipgnosis
Shareholders will be entitled to receive and retain such dividend,
distribution or return of value. To the extent that any such dividend,
distribution or other return of value announced, declared, made or paid is:
(x) transferred pursuant to the Acquisition on a basis which entitles Bidco to
receive the dividend or distribution and to retain it; or (y) cancelled, the
consideration payable will not be subject to change in accordance with this
paragraph. Any exercise by Bidco of its rights referred to in this paragraph
shall be the subject of an announcement and, for the avoidance of doubt, shall
not be regarded as constituting any revision or variation of the Acquisition.
8. No amounts of cash of less than one cent would be paid to any Scheme
Shareholder pursuant to the Scheme and the aggregate amount of cash to which a
Scheme Shareholder would be entitled under the Scheme would be rounded down to
the nearest cent.
9. Under Rule 13.5(a) of the Takeover Code, Bidco may only invoke a
Condition so as to cause the Acquisition not to proceed, to lapse or to be
withdrawn with the consent of the Panel. The Panel will normally only give its
consent if the circumstances which give rise to the right to invoke the
Condition are of material significance to Bidco in the context of the
Acquisition. The conditions contained in Conditions 1 and 2 of Part A above
(and any Takeover Offer Acceptance Condition (as defined below) adopted on the
basis specified in paragraphs 4 or 9 of this Part B) are not subject to this
provision of the Takeover Code. Any Condition that is subject to Rule 13.5(a)
may be waived by Bidco.
10. Bidco reserves the right to elect (with the consent of the Panel (where
necessary)) to implement the Acquisition by way of a Takeover Offer as an
alternative to the Scheme. In such event, the Acquisition will be implemented
on the same terms and conditions (subject to appropriate amendments, including
(without limitation) an acceptance condition set at 90 per cent. of the issued
share capital of Hipgnosis (or such lower percentage (being more than 50 per
cent.) of the issued share capital of Hipgnosis as Bidco may, subject to the
rules of the Takeover Code and with the consent of the Panel, decide) as those
which would apply to the Scheme (each a "Takeover Offer Acceptance
Condition"). Further, if sufficient acceptances of such Takeover Offer are
received and/or sufficient Hipgnosis Shares are otherwise acquired, it is the
intention of Bidco to apply the provisions of Part XVIII of the Companies Law
to compulsorily acquire any outstanding Hipgnosis Shares to which such
Takeover Offer relates.
11. The availability of the Acquisition to Hipgnosis Shareholders not
resident in the United Kingdom or Guernsey may be affected by the laws of the
relevant jurisdictions. Persons who are not resident in the United Kingdom or
Guernsey should inform themselves about and observe any applicable
requirements. Further details in relation to overseas shareholders will be
contained in the Scheme Document.
12. The Acquisition is not being made, directly or indirectly, in, into or
from, or by use of the mails of, or by any means of instrumentality
(including, but not limited to, facsimile, e-mail or other electronic
transmission, telex or telephone) of interstate or foreign commerce of, or of
any facility of a national, state or other securities exchange of, any
Restricted Jurisdiction where to do so would violate the laws of that
jurisdiction.
13. The Acquisition and the Scheme will be governed by the laws of Guernsey
and be subject to the jurisdiction of the Court and to the conditions and
further terms set out in this Appendix 1 and the full terms and conditions to
be set out in the Scheme Document. The Acquisition will also be subject to the
applicable requirements of the Companies Law, the Court (as a result of
Hipgnosis being incorporated in Guernsey), the GFSC, the FCA, the London Stock
Exchange and the Takeover Code.
14. Each of the Conditions will be regarded as a separate Condition and will
not be limited by reference to any other Condition.
APPENDIX 2
BASES AND SOURCES
1 Unless otherwise stated, all financial information
relating to Hipgnosis is prepared in accordance with IFRS and has been
extracted or derived (without adjustment from: (i) the audited financial
statements of Hipgnosis for the period ended 31 March 2023, and (ii) the
unaudited interim financial statements contained in the interim results of
Hipgnosis for the period ended 30 September 2023).
2 All Closing Prices for Hipgnosis Shares have been
derived from Bloomberg as of 17 April 2024, being the Latest Practicable Date,
unless stated otherwise.
3 Volume weighted average prices have been derived
from Bloomberg as of 17 April 2024, being the Latest Practicable Date, and
have been rounded.
4 As at the Latest Practicable date, there were
1,209,214,286 Hipgnosis Shares in issue, all of which are credited as fully
paid and 2,000,000 Hipgnosis shares were held as treasury shares.
5 As at the Latest Practicable Date, the number of
Hipgnosis Shares eligible to vote on: (i) the Scheme at the Court Meeting is
1,208,822,321 Hipgnosis Shares (which excludes shares held as treasury shares
and the Hipgnosis Shares owned by certain senior executives of Concord); and
(ii) the Resolution at the General Meeting is 1,208,822,321 Hipgnosis Shares
(which excludes shares held as treasury shares and the Hipgnosis Shares owned
by certain senior executives of Concord).
6 Valuation information relating to Hipgnosis'
portfolio of investments is from the valuation report produced by Shot Tower
as set out in Appendix 4 of this announcement.
7 For the purposes of Rule 29.1 of the Takeover Code,
set out below is a reconciliation between the unaudited IFRS NAV as at 30
September 2023 and the unaudited Adjusted 30 September 2023 Operative NAV:
US$'000 unless stated otherwise Unaudited IFRS NAV as at 30 September 2023(()(1)()) Adjustment for Operative NAV as per the Interim Results to 30 September Operative NAV as per the Interim Results to 30 September 2023(()(2)()) Adjustment for sale of portfolio of non-core assets(()(3)()) Adjustment for double counting of accrued revenue (()(4)()) Adjustment for Fair Market Value of the Catalogues of Songs (as at 26 March Unaudited Adjusted 30 September 2023 Operative NAV
2023(()(2)()) 2024)(()(5)())
Catalogues of Songs $1,824,675 $797,325 $2,622,000 ($29,100) ($644,597) $1,948,303
Other non-current assets $10,856 $10,856 $10,856
Cash and cash equivalents $34,336 $34,336 $22,970 $57,306
Other current assets $179,825 ($25,948) $153,877 ($107,827) $46,050
Total liabilities ($718,163) ($718,163) ($718,163)
Net assets $1,331,529 $2,102,906 $1,344,352
Total number of Ordinary Shares in issue (excluding treasury shares) 1,209,214 1,209,214 1,209,214
Net asset value per share $1.101 $1.739 $1.112
Net asset value per share(()(6)()) £0.885 £1.398 £0.893
1. As disclosed in the Interim Report for the period ended 30 September
2023
2. Represents the IFRS NAV adjusted for the Fair Value of the Catalogues of
Songs, as disclosed in the Interim Report for the period ended 30 September
2023. Adjustment to "Catalogues of Songs" value reflects the excess of fair
market value as derived by Citrin Cooperman over the net book value. The
adjustment to "other current assets" includes the cost basis of certain
catalogues held for sale by the Company less accumulated depreciation and
amortization
3. Represents the impact of the proceeds from the disposal of non-core assets
of c. 20,000 Songs, as announced by the Company on 11 December 2023 and
reflects a reduction in the fair market value of "Catalogues of Songs" based
on Citrin Cooperman's valuation of the divested catalogs with Cash and cash
equivalents increasing based on the net proceeds realized upon the closing of
the
sale
4. Represents the correction of the double counting of accrued revenue, which
reverses the accrued income balance and royalty accruals on accrued income, in
the calculation of Operative NAV, as announced by the Company on 18 March
2024
5. Represents the adjustment to the fair market value of the Company's
Portfolio using the midpoint of the valuation range valued by Shot Tower
Capital LLC as of 26 March 2024 and announced by the Company on 28 March
2024
6. Using the GBP:USD exchange rate of 1:1.2443 as of 17:00 GMT on 17 April
2024
APPENDIX 3
irrevocable undertakings
Summary of Irrevocable Undertakings
Name of beneficial holder Number of Hipgnosis Shares in respect of which undertaking is given Percentage of Hipgnosis Shares in issue at the Latest Practicable Date (%)
Hipgnosis Directors 327,796 0.027
Other Hipgnosis Shareholders 284,917,641 23.562
Total Hipgnosis Shares 285,245,437 23.589
Irrevocable Undertakings from the Hipgnosis Directors
The following Hipgnosis Directors have given irrevocable undertakings in
respect of their entire beneficial holdings of Hipgnosis Shares to vote or
procure votes in favour of the Resolution to be proposed at the General
Meeting, amounting in aggregate to 327,796 Hipgnosis Shares, representing
approximately 0.027 per cent. of Hipgnosis' existing issued ordinary share
capital as at close of business on the Latest Practicable Date:
Name Number of Hipgnosis Shares in respect of which undertaking is given Percentage of Hipgnosis Shares in issue at the Latest Practicable Date (%)
Robert Naylor 100,000 0.008
Simon Holden 150,796 0.012
Francis Keeling 50,000 0.004
Cindy Rampersaud 27,000 0.002
These irrevocable undertakings will cease to bind if:
(i) the Scheme Document or, if the Acquisition is implemented by
way of a Takeover Offer, the offer document (as applicable) has not been
posted to Hipgnosis Shareholders within 28 days of the issue of this
Announcement (or within such longer period as Bidco and Hipgnosis, with the
consent of the panel, may agree);
(ii) the Scheme or Takeover Offer (as applicable) or the Resolution
to be proposed is not approved by the requisite majority of the Hipgnosis
Shareholders at the General Meeting or the Court Meeting;
(iii) the Scheme or Takeover Offer (as applicable) has not become
Effective, or become or been declared unconditional in all respects (as the
case may be), on or before the Long Stop Date;
(iv) the Scheme does not become Effective or, as applicable, the Offer
lapses or is withdrawn and no new, revised or replacement Scheme or Takeover
Offer is or has been announced in accordance with the Takeover Code at the
same time;
(v) before despatch of the Scheme Document or, if the Acquisition is
implemented by way of a Takeover Offer, the offer document (as the case may
be) any event occurs or becomes known to Bidco or its financial adviser as a
result of which the Panel requires or agrees that Bidco need not make the
offer; or
(vi) any competing offer for the entire issued and to be issued share
capital of Hipgnosis is declared unconditional or, if implemented by way of a
scheme of arrangement, becomes effective
Irrevocable Undertakings from other Hipgnosis Shareholders
In addition to the irrevocable undertakings given by the Hipgnosis Directors
as set out above, Bidco has received irrevocable undertakings to vote in
favour of the Scheme at the Court Meeting, and in favour of the Resolution at
the General Meeting (or, in the event that the Acquisition is implemented by
way of a Takeover Offer, to accept or procure acceptance of the Takeover
Offer), in respect of, in aggregate, 284,917,641 Hipgnosis Shares representing
approximately 23.56 per cent. of Hipgnosis' issued share capital as at the
Latest Practicable Date.
Name of Hipgnosis Shareholder Number of Hipgnosis Shares in respect of which undertaking is given Percentage of Hipgnosis Shares in issue at the Latest Practicable Date (%)
Asset Value Investors Limited 90,141,594 7.455
CCLA Investment Management 57,725,227 4.774
Schroder & Co Limited 54,247,904 4.486
J O Hambro Capital Management Limited 20,453,123 1.691
Madison Avenue Partners, LP 18,621,841 1.540
Gresham House Asset Management Ltd 16,585,952 1.372
Hawksmoor Investment Management 15,585,000 1.289
Premier Fund Managers Limited 11,557,000 0.956
These irrevocable undertakings will cease to bind:
(i) if the Scheme Document or, if the Acquisition is implemented
by way of a Takeover Offer, the offer document (as applicable) has not been
posted to Hipgnosis Shareholders within 28 days of the issue of this
Announcement (or within such longer period as Bidco and Hipgnosis, with the
consent of the Panel, may agree);
(ii) in the case of Madison Avenue Partners, LP, if the Court
Meeting and the General Meeting are not held by 30 June 2024;
(iii) if the Scheme or Takeover Offer (as applicable) or the
Resolution is not approved by the requisite majority of: (a) the Scheme
Shareholders at the Court Meeting or (b) the Hipgnosis Shareholders at the
General Meeting (as the case may be);
(iv) if the Scheme or Takeover Offer (as applicable) has not become
Effective, or become or been declared unconditional in all respects (as the
case may be), on or before the Long Stop Date;
(v) if the Scheme does not become Effective or, as applicable, the
offer lapses or is withdrawn and no new, revised or replacement Scheme or
Takeover Offer is or has been announced in accordance with the Takeover Code
at the same time;
(vi) if before despatch of the Scheme Document or, if the Acquisition
is implemented by way of a Takeover Offer, the offer document (as the case may
be) any event occurs or becomes known to Bidco or its financial adviser as a
result of which the Panel requires or agrees that Bidco need not make the
offer;
(vii) if any competing offer for the entire issued and to be issued
share capital of Hipgnosis is declared unconditional or, if implemented by way
of a scheme of arrangement, becomes effective;
(viii) if a competing offer for the entire issued and to be issued ordinary share capital of Hipgnosis, howsoever structured, is announced provided that such offer represents a value per Hipgnosis Share of not less than 10 per cent above the maximum value of the offer price of US$1.18 per Scheme Share (or in the case of Madison Avenue Partners, LP, a value per Hipgnosis Share of not less than 5 per cent above the value of the offer price of US$1.16 per Scheme Share (excluding any contingent element of the consideration); or
(ix) in the case of Premier Fund Managers Limited, in respect of any Hipgnosis Shares that are required to be sold to meet redemption requests or to ensure compliance with the investment and borrowing limits set out under the FCA's Collective Investment Scheme Sourcebook, provided they have used all reasonable endeavours to explore other options to meet these regulatory obligations.
Letter of Intent
Bidco has also received a non-binding letter of intent to vote in favour of
the Scheme at the Court Meeting, and in favour of the Resolution at the
General Meeting (or, in the event that the Acquisition is implemented by way
of a Takeover Offer, to accept or procure acceptance of the Takeover Offer),
in respect of, in aggregate, 70,000,000 Hipgnosis Shares representing
approximately 5.789 per cent. of Hipgnosis' issued share capital as at the
Latest Practicable Date.
Name of Hipgnosis Shareholder Number of Hipgnosis Shares in respect of which undertaking is given Percentage of Hipgnosis Shares in issue at the Latest Practicable Date (%)
Investec Wealth & Investment Limited 70,000,000 5.789
APPENDIX 4
VALUATION REPORT
To view the full valuation report, please click on the below link:
https://communications.singercm.com/p/4UWI-ETV/recommended-cash-offer-hipgnosis
(https://communications.singercm.com/p/4UWI-ETV/recommended-cash-offer-hipgnosis)
APPENDIX 5
DEFINITIONS
The following definitions apply throughout this Announcement unless the
context requires otherwise.
"A&R"
artists and repertoire;
"Acquisition"
the proposed acquisition by Bidco of the entire issued and to be issued
ordinary share capital of Hipgnosis, to be implemented by means of the Scheme
(or by way of a Takeover Offer under certain circumstances described in this
Announcement) and, where the context requires, any subsequent revision,
variation, extension or renewal thereof;
"Adjusted 30 September 2023
Operative
NAV"
Hipgnosis' Operative NAV based on the Operative NAV as at 30 September 2023 of
US$2,102,906,000 adjusted for (i) the sale of the portfolio of non-core
assets; (ii) the double counting of accrued revenue; and (iii) Shot Tower's
valuation of the fair market value of the catalogues of songs as at 26 March
2024, as set out in Appendix 2 paragraph 8;
"AIF"
an alternative investment fund, within the meaning of the EU AIFM Directive or
the UK AIFMD Laws (as applicable)
"Announcement"
this announcement made pursuant to Rule 2.7 of the Takeover Code;
"Announcement Exchange Rate" the GBP:USD exchange rate of
1:1.2443 as at 17:00 GMT on 17 April 2024 as derived from data provided by
Bloomberg;
"Apollo"
Apollo Capital Management, L.P. and/or one or more or its affiliates;
"Apollo
Funds"
certain investment funds, accounts or entities managed, advised and/or
affiliated with, and/or owned (in whole or in part) or controlled by, Apollo;
"Authorisations"
regulatory authorisations, orders, recognitions, grants, consents, clearances,
confirmations, certificates, licences, permissions or approvals;
"Bid Conduct Agreement" the bid conduct
agreement dated 18 April 2024 between Concord and Apollo;
"Bidco"
Concord Chorus Limited;
"Bidco
Group"
Bidco and its subsidiaries and subsidiary undertakings from time to time and,
where the context permits, each of them;
"Bidco
Directors" the
directors of Bidco at the date of this Announcement or, where the context so
requires, the directors of Bidco from time to time;
"Business
Day" a
day (other than Saturdays, Sundays and public holidays in the UK and Guernsey)
on which banks are generally open for normal business in the City of London
and Guernsey;
"Call
Option"
pursuant to the terms of the Investment Advisory Agreement, the Investment
Adviser's right to acquire Hipgnosis' portfolio (as at the date of termination
of the Investment Advisory Agreement) in the event the Investment Adviser is
terminated in certain specified circumstances;
"Concord"
Alchemy Copyrights, LLC, trading as Concord;
"Concord
Group" Concord
and its subsidiaries and subsidiary undertakings from time to time and, where
the context permits, each of them;
"Closing
Price"
the closing middle market quotation of a Hipgnosis Share as derived from
Bloomberg on any particular date;
"Combined Group" the
Concord Group and the Bidco Group as enlarged by the Hipgnosis Group following
completion of the Acquisition;
"Companies Act"
the UK Companies Act 2006, as amended from time to time;
"Companies Law"
the Companies (Guernsey) Law, 2008, as amended from time to time;
"Conditions"
the conditions of the Acquisition set out in Appendix 1 to this Announcement
and to be set out in full in the Scheme Document;
"Confidentiality Agreement" the confidentiality
agreement dated 27 March 2024 between Concord and Hipgnosis;
"Co-Operation Agreement" the co-operation
agreement dated 18 April 2024 between Bidco and Hipgnosis;
"Court"
the Royal Court of Guernsey;
"Court
Hearing"
the Court hearing at which Hipgnosis will seek an order sanctioning the Scheme
for the purposes of section 110 of the Companies Law;
"Court
Meeting"
the meeting or meetings of the Scheme Shareholders to be convened pursuant to
an order of the Court pursuant to section 107 of the Companies Law for the
purpose of considering and, if thought fit, approving the Scheme, including
any adjournment, postponement or reconvention of any such meeting, notice of
which shall be contained in the Scheme Document;
"Court
Order"
the order of the Court sanctioning the Scheme;
"CREST"
the system for the paperless settlement of trades in securities and the
holding of uncertificated securities operated by Euroclear in accordance with
the Uncertificated Securities (Guernsey) Regulations, 2009;
"Dealing Disclosure" an
announcement pursuant to Rule 8 of the Takeover Code containing details of
dealings in interests in relevant securities of a party to an offer;
"Disclosed"
the information disclosed: (i) fairly in writing to Bidco (or its respective
officers, employees, agents or advisers) by, or on behalf of, the Hipgnosis
Group in connection with the Acquisition (including via the virtual data room
established by, or on behalf of, Hipgnosis for the purposes of the
Acquisition) prior to the publication of this Announcement; (ii) in the annual
report and accounts of the Hipgnosis Group for the financial year ended 31
March 2023; (iii) in this Announcement; and/or (iv) in any other announcement
made by, or on behalf of, Hipgnosis via a Regulatory Information Service
before the publication of this Announcement;
"Disclosure Guidance and
Transparency Rules" the
disclosure guidance and transparency rules made by the FCA under Part VI of
FSMA;
"Effective"
in the context of the Acquisition:
(i) if the Acquisition is implemented by way of the Scheme,
the Scheme having become effective in accordance with its terms upon the
delivery of a copy of the Court Order to the Guernsey Registry; or
(ii) if Bidco elects to implement the Acquisition by way of a
Takeover Offer, such Takeover Offer having been declared unconditional in all
respects in accordance with the requirements of the Takeover Code;
"Effective
Date"
the date on which the Scheme becomes Effective;
"EU AIFM Directive"
Directive 2011/61/EU of the European Parliament and of the Council of 8 June
2011 on Alternative Investment Fund Managers and amending Directives
2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No
1095/2010, and the EU AIFM Delegated Regulation;
"Euroclear"
Euroclear UK & International Limited, the operator of CREST;
"European Union"
the economic and political confederation of European nations which share a
common foreign and security policy and co-operate on justice and home affairs
known as the European Union;
"Excluded Shares" any
Hipgnosis Shares which are: (i) registered in the name of, or beneficially
owned by, Bidco or any other member of the Wider Bidco Group or any of their
respective nominees or associates; or (ii) held as treasury shares, in each
case at any relevant time;
"FCA" or "Financial Conduct
Authority"
the Financial Conduct Authority acting in its capacity as the competent
authority for the purposes of Part VI of FSMA, or any successor regulatory
body;
"Forms of
Proxy" the
forms of proxy in connection with each of the Court Meeting and the General
Meeting which will accompany the Scheme Document;
"FSMA"
the Financial Services and Markets Act 2000, as amended from time to time;
"General Meeting"
the general meeting of Hipgnosis Shareholders (including any adjournment,
postponement or reconvention thereof) to be convened for the purpose of
authorising the Hipgnosis Directors to take all actions necessary for carrying
the Scheme into effect and making certain amendments to the Hipgnosis
Articles;
"GFSC"
the Guernsey Financial Services Commission;
"Governmental Body" any
supranational, national, state, municipal, local or foreign government, any
minister or instrumentality, subdivision, court or tribunal, arbitrator or
arbitrator panel, regulatory or administrative agency or commission, or other
authority thereof, or any regulatory or quasi-regulatory organisation or
private body exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority;
"Gross Asset Value" at
any date, the aggregate of: (i) the value of all the investments of Hipgnosis
as determined by the Directors and calculated in the case of copyrights by
reference to an independent valuer's determination of the appropriate current
value for such copyrights, which is to be calculated in accordance with
Hipgnosis' latest published valuation methodology, among other things, as
regards the fair market value of the copyrights; and (ii) the amount which, in
accordance with Hipgnosis' latest published valuation methodology, fairly
reflects the value of all other assets of Hipgnosis;
"Guernsey"
the Island of Guernsey;
"Guernsey Registry"
the body authorised by the State of Guernsey to maintain various registers as
required under Guernsey legislation and operating under the name Guernsey
Registry;
"Hipgnosis" or "Company" Hipgnosis Songs Fund
Limited, a non-cellular company incorporated under the laws of Guernsey with
registered number 65158 and which has its registered office at PO Box 286,
Floor 2, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 4LY;
"Hipgnosis Articles" the
articles of incorporation of Hipgnosis, as amended from time to time;
"Hipgnosis Directors" or
"Hipgnosis Board"
the directors of Hipgnosis at the date of this Announcement or, where the
context so requires, the directors of Hipgnosis from time to time;
"Hipgnosis Group"
Hipgnosis and its subsidiaries and subsidiary undertakings from time to time
and, where the context permits, each of them;
"Hipgnosis Shareholders" holders of
Hipgnosis Shares from time to time;
"Hipgnosis Shares"
ordinary shares of no par value in the capital of Hipgnosis and each being a
"Hipgnosis Share";
"Hipgnosis
Sub"
Hipgnosis Songs Holdings UK Limited;
"Holdco"
Chorus SPV, LLC;
"IFRS"
International Financial Reporting Standards;
"Investment Adviser"
Hipgnosis Song Management Limited;
"Investment Advisory Agreement" the investment advisory agreement
between the Investment Adviser, Hipgnosis and Hipgnosis Songs Holdings UK
Limited dated 27 June 2018;
"ISIN"
International Securities Identification Number;
"J.P. Morgan Cazenove" J.P. Morgan
Securities LLC and its affiliate J.P. Morgan Securities plc, which conducts
its UK investment banking business as J.P. Morgan Cazenove, financial adviser
to Bidco;
"Latest Practicable Date" 17 April
2024;
"Listing
Rules"
the rules and regulations made by the FCA under FSMA and contained in the
publication of the same name, as amended from time to time;
"London Stock Exchange" London Stock
Exchange Group plc;
"Long Stop
Date" 5
November 2024 or such later date (if any) as Bidco and Hipgnosis may (with the
consent of the Panel) agree and (if required) the Court may allow;
"Main
Market"
the London Stock Exchange's main market for listed securities;
"Market Abuse Regulation" the UK version of
EU Regulation No. 596/2014, which has effect in English law by virtue of the
European Union (Withdrawal) Act 2018, as amended by the Market Abuse
(Amendment) (EU Exit) Regulations 2019;
"Offer
Period"
the offer period (as defined by the Takeover Code) relating to Hipgnosis,
which commenced on the date of this Announcement;
"Official
List"
the official list of the FCA;
"Opening Position Disclosure" has the same meaning as in
Rule 8 of the Takeover Code;
"Operative
NAV" at any
date, the Gross Asset Value less the amount which (to the extent not otherwise
deducted in the calculation of Gross Asset Value), in accordance with
Hipgnosis' latest published valuation methodology, fairly reflects the amount
of the liabilities and expenses of Hipgnosis;
"Operative NAV per Hipgnosis Share" the Operative NAV divided by the number of
Hipgnosis Shares in issue at the time of calculation;
"Overseas Shareholders" Hipgnosis
Shareholders (or nominees of, or custodians or trustees for Hipgnosis
Shareholders) not resident in, or nationals or citizens of, the United Kingdom
or Guernsey;
"Panel"
the UK Panel on Takeovers and Mergers;
"Regulatory Conditions" the
conditions set out in paragraphs 3(a) to 3(c) of Appendix 1 to this
Announcement;
"Regulatory Information Service" any information service
approved by the London Stock Exchange for the distribution to the public of
announcements and included within the list maintained on the London Stock
Exchange's website;
"Resolution"
the resolution proposed to be passed at the General Meeting in connection with
the amendment of the Hipgnosis Articles and such other matters as may be
necessary to implement the Scheme;
"Restricted Jurisdiction" any
jurisdiction where local laws or regulations may result in a significant risk
of civil, regulatory or criminal exposure if information concerning the Scheme
is sent or made available to Hipgnosis Shareholders in that jurisdiction;
"Scheme"
the proposed scheme of arrangement under Part VIII of the Companies Law
between Hipgnosis and Scheme Shareholders in connection with the Acquisition,
with or subject to any modification, addition or condition approved or imposed
by the Court and agreed by Hipgnosis and Bidco;
"Scheme Document" the
document to be sent to Hipgnosis Shareholders containing, amongst other
things, the full terms and conditions of the Scheme, an explanatory statement
in compliance with Part VIII of the Companies Law, and the notices convening
the Court Meeting and the General Meeting;
"Scheme Record Time" the time and
date specified in the Scheme Document by reference to which the entitlements
of Scheme Shareholders under the Scheme will be determined, expected to be
6.00 p.m. on the Business Day immediately prior to the Effective Date;
"Scheme Shareholders" a holder of
Scheme Shares from time to time;
"Scheme Shares"
all Hipgnosis Shares which are:
(i) in issue at the date of the Scheme Document and which
remain in issue at the Scheme Record Time;
(ii) (if any) issued after the date of the Scheme Document, but
at or before the Scheme Voting Record Time and which remain in issue at the
Scheme Record Time; and
(ii) (if any) issued after the Scheme Voting Record Time but at
or before the Scheme Record Time, either on terms that the original or any
subsequent holder thereof shall be bound by the Scheme, or in respect of which
the original or any subsequent holder is, or shall have agreed in writing to
be, bound by the Scheme and which remain in issue at the Scheme Record Time,
in each case other than any Excluded Shares;
"Scheme Voting Record Time" the date and time specified
in the Scheme Document by reference to which entitlement to vote at the Court
Meeting will be determined;
"Shot
Tower"
Shot Tower Capital, LLC;
"Significant Interest" in
relation to an undertaking or partnership, a direct or indirect interest of 20
per cent. or more of the total voting rights conferred by the equity share
capital (as defined in section 548 of the Companies Act) of such undertaking
or the relevant partnership interest;
"Singer Capital Markets" Singer
Capital Markets Advisory LLP, Rule 3 adviser to Hipgnosis;
"Takeover
Code" the
City Code on Takeovers and Mergers;
"Takeover
Offer" if
the Acquisition is implemented by way of a takeover offer (which shall be an
offer for the purposes of section 337 of the Companies Law), the offer to be
made by or on behalf of Bidco to acquire the entire issued and to be issued
ordinary share capital of Hipgnosis including, where the context admits, any
subsequent revision, variation, extension or renewal of such offer;
"Third
Party"
each of any relevant central bank, government or governmental,
quasi-governmental, supranational, statutory, regulatory, environmental or
investigative body, court, trade agency, association, institution, any entity
owned or controlled by any relevant government or state, or any other body or
person whatsoever in any jurisdiction;
"UK" or "United Kingdom" the United Kingdom
of Great Britain and Northern Ireland;
"UK
AIFMD"
the Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773) and
any other implementing measure which operated to transpose EU AIFM Directive
into UK law before 31 January 2020 (as amended from time to time including by
the Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations
2019 (SI 2019/328));
"United States of America" or "US" United States of America, its
territories and possessions, all areas subject to its jurisdiction or any
subdivision thereof any state of the United States and the District of
Columbia;
"US Exchange Act"
the United States Securities Exchange Act of 1933, as amended, and the rules
and regulations promulgated thereunder;
"Wider Bidco Group'
Concord, the Apollo Funds, each of their subsidiary undertakings, associated
undertakings and any other undertaking in which Concord, Apollo and/or such
undertakings (aggregating their interests) have a Significant Interest; and
"Wider Hipgnosis Group" Hipgnosis, its
subsidiary undertakings, associated undertakings and any other undertaking in
which Hipgnosis and/or such undertakings (aggregating their interests) have a
Significant Interest.
In this Announcement, "subsidiary", "subsidiary undertaking", "undertaking"
and "associated undertaking" have the respective meanings given thereto by the
Companies Act.
All references to "pounds", "pounds Sterling", "Sterling", "£", "pence",
"penny" and "p" are to the lawful currency of the United Kingdom.
All references to "dollars", "US dollars", "US$", "$", and "cent" are to the
lawful currency of the United States of America.
All references to a statutory provision or law or to any order or regulation
shall be construed as a reference to that provision, law, order or regulation
as extended, modified, replaced or re-enacted from time to time and all
statutory instruments, regulations and orders from time to time made
thereunder or deriving validity therefrom.
All the times referred to in this Announcement are London (UK) times unless
otherwise stated.
References to the singular include the plural and vice versa.
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