Blackstone Europe Hipgnosis Songs Fund - REVISED RECOMMENDED CASH ACQUISITION OF HIPGNOSIS

Hipgnosis Songs Fund

03/06/2024 07:00

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RNS Number : 7523Q  Blackstone Europe LLP  03 June 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 OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

3 June 2024

REVISED RECOMMENDED CASH ACQUISITION

of

HIPGNOSIS SONGS FUND LIMITED

by

LYRA BIDCO LIMITED

(a newly-formed company indirectly wholly-owned by investment funds advised by
affiliates of Blackstone Inc.)

to be implemented by means of a scheme of arrangement under Part VIII of the
Companies (Guernsey) Law, 2008 (as amended)

 

1.   Introduction

On 29 April 2024, the boards of directors of Lyra Bidco Limited ("Bidco") and
Hipgnosis Songs Fund Limited ("Hipgnosis") jointly announced (the "29 April
Announcement") that they had reached agreement on the terms and conditions of
a recommended all cash acquisition (the "Initial Offer") by Bidco of the
entire issued, and to be issued, ordinary share capital of Hipgnosis (the
"Acquisition"), to be effected by means of a takeover offer for the purposes
of section 337 of the Companies Law (an "Offer").

The Bidco Board and Hipgnosis Board subsequently announced on 24 May 2024 (the
"24 May Announcement") that, with the consent of the Panel, there would be a
short delay in the posting of the Offer Document in respect of the Initial
Offer and that Bidco would post the Offer Document no later than 3 June 2024.

In response to a briefing paper, the CMA has confirmed in writing that it
requires no further information on the Acquisition at this stage. Accordingly,
Condition (as defined in the 29 April Announcement) 2.1.1 to the Acquisition,
as set out in Part A of Appendix 1 to the 29 April Announcement, is therefore
satisfied, provided that the CMA shall not have raised or otherwise indicated
to the parties that it has outstanding questions relating to the Acquisition
at the time all other Conditions to the Acquisition are satisfied. Completion
of the Acquisition remains subject to the satisfaction (or, where applicable,
waiver) of the outstanding Conditions.

Capitalised terms which are not otherwise defined in this announcement have
the same meanings as set out in the 29 April Announcement.

2.   Revised Offer and switch to a Scheme

The Bidco Board and the Hipgnosis Board are pleased to announce that they have
reached agreement on the terms and conditions of an increased and revised
recommended cash acquisition (the "Revised Offer") by Bidco in respect of the
Acquisition.

The Panel on Takeovers and Mergers (the "Panel") has granted its consent under
Section 8 of Appendix 7 of the City Code on Takeovers and Mergers (the
"Takeover Code") for the Acquisition to be implemented by way of a scheme of
arrangement under Part VIII of the Companies Law (a "Scheme") on the basis set
out in paragraph 4 of this announcement.

Further details of the Scheme, including expected times and dates for each of
the Court Meeting, the General Meeting and the relevant hearing at which the
Scheme would be sanctioned (the "Sanction Hearing"), together with notices of
the Court Meeting and General Meeting, will be set out in the Scheme Document.
With the consent of the Panel, the Scheme Document and the forms of proxy
accompanying the Scheme Document will be published as soon as practicable and,
in any event, by no later than 14 June 2024 (or such later date as Bidco and
Hipgnosis may, with the consent of the Panel, agree and, if required, the
Court may approve).

3.   Revised Offer Price

Under the terms of the Revised Offer, each Hipgnosis Shareholder will be
entitled to receive:

for each Hipgnosis Share: $1.31 in cash

The GBP equivalent value of the Revised Offer price of $1.31 in cash per
Hipgnosis Share (the "Revised Offer Price") based on the Announcement Exchange
Rate, being 105 pence, represents a premium of approximately:

·    49.2 per cent. to the Closing Price of 71 pence per Hipgnosis Share
on 17 April 2024 (being the last Business Day before the commencement of the
Offer Period);

·    54.8 per cent. to the volume-weighted average price of 68 pence per
Hipgnosis Share for the one-month period ended 17 April 2024 (being the last
Business Day before the commencement of the Offer Period); and

·    59.3 per cent. to the volume-weighted average price of 66 pence per
Hipgnosis Share for the three-month period ended 17 April 2024 (being the last
Business Day before the commencement of the Offer Period).

The Revised Offer values Hipgnosis' entire issued, and to be issued, ordinary
share capital at approximately $1,584 million (which is equivalent to £1,272
million based on the Announcement Exchange Rate).

The increase of $0.01 per Hipgnosis Share from the Acquisition Price to the
Revised Offer Price has come about as a result of discussions between the
Hipgnosis Board, Bidco Board and their respective advisers and in part
reflects Hipgnosis incurring lower adviser fees in respect of the transaction
than previously expected.

For the purposes of this announcement, a Scheme Share means any Hipgnosis
Share which is:

(a)  in issue as at the date of the Scheme Document and which remains in
issue as at the time and date to be specified in the Scheme Document, expected
to be 6.00 p.m. on the Business Day immediately following the date of the
Sanction Hearing (the "Scheme Record Time");

(b)  (if any) issued after the date of the Scheme Document, but at or before
the Voting Record Time and which remain in issue at the Scheme Record Time;
and

(c)  (if any) issued after the 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 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 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 (ii) held as treasury
shares, in each case at the relevant time.

Bidco will procure that a facility will be made available under which any
holder of Scheme Shares at any relevant date or time (each, a "Scheme
Shareholder") will be able to elect (subject to the terms and conditions of
the facility) to receive the cash consideration in Sterling (after deduction
of any transaction or dealing costs associated with the conversion) at the
applicable market exchange rate on the latest practicable date for fixing such
rate prior to the relevant payment date. Further details of this facility and
the election to be made by Scheme Shareholders wishing to receive their cash
consideration in Sterling will be set out in the Scheme Document and the Form
of Election. On the basis of the Announcement Exchange Rate, the cash
consideration implies an equivalent value of 105 pence per Scheme Share. For
any Scheme Shareholder electing to be paid their cash consideration in
Sterling, the amount per Scheme Share received may, depending on the
prevailing exchange rate, result in a payment below or above 105 pence per
Scheme Share.

The Scheme Shares will be acquired pursuant to the Acquisition fully paid and
free from all liens, charges, equities, encumbrances, rights of pre‑emption
and any other interests of any nature whatsoever and together with all rights
attaching thereto, including without limitation voting rights and the right to
receive and retain in full all dividends and other distributions (if any)
announced, declared, made or paid with a record date on or after the date of
this announcement.

An updated valuation report will be included within the Scheme Document.

If, on or after the date of the 29 April Announcement and prior to completion
of the Acquisition, any dividend and/or other distribution is announced,
declared, made or paid or becomes payable in respect of the Hipgnosis Shares
with a record date prior to completion of the Acquisition, Bidco reserves the
right to reduce the consideration payable under the terms of the Acquisition
for the Hipgnosis Shares by an amount up to the aggregate amount of such
dividend and/or distribution, in which case any reference in this announcement
to the consideration payable under the terms of the Acquisition will be deemed
to be a reference to the consideration as so reduced. 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 terms of the Revised Offer or
the Acquisition. In such circumstances, Hipgnosis Shareholders would be
entitled to retain any such dividend or distribution declared, made or paid.

4.   Switch to a Scheme and Follow-on Offer in the event of a Scheme Lapse

Having taken various considerations into account, including the fact that the
Initial Offer would have been subject to the Acceptance Condition of 55 per
cent. of the voting rights then exercisable at a general meeting of Hipgnosis
Shareholders, the Panel has (at the request of Bidco and having considered the
views of the Hipgnosis Board and Singer Capital Markets in its capacity as
Rule 3 Adviser to Hipgnosis) granted its consent under Section 8 of Appendix 7
of the Takeover Code to be implemented by way of a Scheme, subject to the
following condition.

In summary, the Panel has ruled that, in the event that:

(a)        the Scheme in respect of the Revised Offer is treated as having "lapsed", that is, if it is withdrawn or fails to become effective; or
(b)        the Panel is satisfied that there is a reasonable likelihood that the Scheme will be withdrawn or fail to become effective,
in each case for a reason or reasons which, in the opinion of the Panel, would not have caused the Initial Offer to lapse, (each, a "Scheme Lapse") Bidco must announce and make a new Offer on the basis set out below (the "Follow-on Offer").

If a Scheme Lapse occurs, Bidco must:

·    immediately announce a firm intention to make the Follow-on Offer in
accordance with Rule 2.7 of the Takeover Code (the "Follow-on Announcement");
and

·    within two Business Days of the Scheme Lapse having occurred, make
the Follow-on Offer by publishing the Offer Document under and in accordance
with Rule 24 of the Takeover Code.

The Follow-on Offer as described in the Follow-on Announcement and as made by
Bidco in the Offer Document will be:

·    at the price of the Revised Offer at the time of the Scheme Lapse;
and

·    otherwise on the same terms and conditions as the Initial Offer,
including the Acceptance Condition, as set out in the 29 April Announcement,
of such number of Hipgnosis Shares as shall, when aggregated with Hipgnosis
Shares acquired or unconditionally agreed to be acquired (whether pursuant to
the Offer or otherwise) by Bidco, represent Hipgnosis Shares carrying not less
than 55 per cent. of the voting rights then exercisable at a general meeting
of Hipgnosis Shareholders (or such lower percentage as Bidco may decide),
provided that Bidco shall hold or have acquired or agreed to acquire (whether
pursuant to the Offer or otherwise) directly or indirectly, Hipgnosis Shares
carrying in aggregate more than 50 per cent. of the voting rights then
normally exercisable at a general meeting of Hipgnosis.

5.   Intentions for Hipgnosis

The Revised Offer does not change Bidco's intentions as regards Hipgnosis as
set out in the 29 April Announcement.

6.   Recommendation

In light of the terms of the Revised Offer as compared to the Initial Offer,
the Hipgnosis Directors, who have been so advised by Singer Capital Markets as
to the financial terms of the Revised Offer, 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 should vote in favour of the Scheme at the requisite Court
Meeting and that Hipgnosis Shareholders vote in favour of the Resolutions at a
General Meeting of Hipgnosis Shareholders (or, in the event that the
Acquisition is implemented by way of an Offer, that Hipgnosis Shareholders
accept or procure acceptance of the Offer), and have irrevocably undertaken to
do so in respect of their own beneficial holdings totalling in aggregate
327,796 Hipgnosis Shares, representing approximately 0.027 per cent. of the
issued share capital of Hipgnosis as at the close of business on 31 May 2024
(being the Business Day prior to the date of this announcement). Further
details of these undertakings, including the circumstances in which they cease
to be binding, are set out in Appendix 3 to this announcement.

7.   Irrevocable Undertakings

As set out in the 24 May Announcement, Bidco has received irrevocable
undertakings from the Hipgnosis Directors who hold Hipgnosis Shares to vote
(or, where applicable, procure voting) in favour of the resolutions relating
to the Scheme and the Acquisition at the Meetings (or in the event that the
Acquisition is implemented by an Offer, to accept or procure acceptance of
such Offer), in respect of, in aggregate, 327,796 Hipgnosis Shares
(representing approximately 0.027 per cent. of the existing issued ordinary
share capital of Hipgnosis as at 31 May 2024, being the last Business Day
before the date of this announcement). These undertakings will remain binding
in the event that a higher competing offer for Hipgnosis is made.

As further set out in the 24 May Announcement, Bidco has also received
irrevocable undertakings from certain Hipgnosis Shareholders who are close
relatives of certain of the Hipgnosis Directors to vote (or, where applicable,
procure voting) in favour of the resolutions relating to the Scheme and the
Acquisition at the Meetings (or in the event that the Acquisition is
implemented by an Offer, to accept or procure acceptance of such Offer), in
respect of, in aggregate, 50,000 Hipgnosis Shares (representing approximately
0.004 per cent. of the existing issued ordinary share capital of Hipgnosis as
at 31 May 2024, being the last Business Day before the date of this
announcement). These undertakings will also remain binding in the event that a
higher competing offer for Hipgnosis is made.

Bidco has, therefore, received irrevocable undertakings in respect of a total
of 377,796 Hipgnosis Shares (representing approximately 0.03 per cent. of the
existing issued ordinary share capital of Hipgnosis as at 31 May 2024, being
the last Business Day before the date of this announcement).

Further details of these irrevocable undertakings, including the circumstances
in which they cease to be binding, are set out in Appendix 3 to this
announcement.

8.   Financing of the Acquisition

The cash consideration payable to Hipgnosis Shareholders under the terms of
the Revised Offer will be financed by an equity investment into Bidco from the
Blackstone Funds.

Jefferies, in its capacity as financial adviser to Bidco, is satisfied that
sufficient resources are available to Bidco to satisfy in full the cash
consideration payable to Hipgnosis Shareholders under the terms of the Revised
Offer.

Further information on the financing of the Acquisition will be set out in the
Scheme Document.

9.   A&R Cooperation Agreement

In connection with the Revised Offer, Bidco and Hipgnosis have entered into an
amended and restated cooperation agreement in relation to the cooperation
agreement previously entered into between Bidco and Hipgnosis on 29 April
2024, as amended and restated on 9 May 2024 (the "A&R Cooperation
Agreement"). Under the terms of the A&R Cooperation Agreement, Bidco and
Hipgnosis have, amongst other things, each agreed to cooperate in certain
matters relating to obtaining regulatory clearances in relation to the
Acquisition. In addition, Bidco may elect to implement the Acquisition by
means of an Offer, in the event of which Bidco has agreed to certain
provisions if the Scheme should switch to an Offer.  The A&R Cooperation
Agreement will terminate in certain circumstances, including if the
Acquisition is withdrawn, terminated or lapses, a third party announces a
possible or firm intention to make an offer for Hipgnosis which completes,
becomes effective or becomes unconditional, or if prior to the Long Stop Date
any Condition has been invoked by Bidco (with the consent of the Panel), if
the Hipgnosis Directors withdraw their recommendation of the Acquisition or if
completion of the Acquisition does not occur in accordance with its terms by
the Long Stop Date or otherwise as agreed between Bidco and Hipgnosis.
Pursuant to the terms of the A&R Cooperation Agreement, Bidco undertakes
that it will inform Hipgnosis confirming if, to the extent permitted by the
Panel, it intends to invoke or treat as unsatisfied or incapable of
satisfaction one or more Conditions.

10. Disclosures

Bidco confirms that there have been no changes to the Disclosure of Interests
in Hipgnosis Securities in paragraph 10 of the 29 April Announcement.

11. Timetable and conditions

It is intended that, having received consent from the Panel and the Hipgnosis
Board, the Acquisition will be implemented by way of a Scheme (although Bidco
reserves the right to elect to implement the Acquisition by means of an Offer,
subject to the Panel's consent and the terms of the A&R Cooperation
Agreement).

"Condition" shall mean each of the conditions listed in Part A of Appendix 1
to this announcement and any reference to a numbered Condition shall be a
reference to the Condition set out in the paragraph of Part A of Appendix 1 to
this announcement bearing such number.

In response to a briefing paper, the CMA has confirmed in writing that it
requires no further information on the Acquisition at this stage. Accordingly,
Condition 3.1.1 to the Acquisition, as set out in Part A of Appendix 1 to this
announcement, is therefore satisfied, provided that the CMA shall not have
raised or otherwise indicated to the parties that it has outstanding questions
relating to the Acquisition at the time all other Conditions to the
Acquisition are satisfied.

The Acquisition remains subject to the satisfaction or, where applicable,
waiver of the outstanding Conditions, which are set out in full in Appendix 1
to this announcement along with certain other terms, and to the full terms and
conditions to be set out in the Scheme Document, and will only become
effective in accordance with its terms ("Effective") if, among other things,
the following events occur on or before 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 approve):

·    the resolution to approve the Scheme is passed by a majority in
number of Scheme Shareholders present and voting (and entitled to vote) at the
Court Meeting, either in person or by proxy, representing 75 per cent. or more
of the voting rights held by those Hipgnosis Shareholders;

·    the Resolution necessary to implement the Scheme and the Acquisition
is passed by the requisite majority of Hipgnosis Shareholders at the General
Meeting;

·    following the Meetings and satisfaction and/or waiver (where
applicable) of the other Conditions, the Scheme is sanctioned by the Court
(without modification, or with modification on terms agreed by the Bidco and
Hipgnosis) at the Sanction Hearing; and

·    following such sanction at the Sanction Hearing, a copy of the order
of the Court sanctioning the Scheme (the "Court Order") is delivered to the
Guernsey Registrar.

The Conditions in paragraphs 1 and 2 of Part A of Appendix 1 to this
announcement provide that the Scheme will lapse (under the authority of Rule
13.5(b) of the Takeover Code) if:

·    the Court Meeting and the General Meeting not being held on or before
the 21st day after the expected date of the Meetings as set out in the Scheme
Document when published (or such later date, if any, as the Panel may consent
to);

·    the Sanction Hearing to approve the Scheme not being held on or
before the 21st day after the expected date of the Sanction Hearing as set out
in the Scheme Document when published (or such later date, if any, as the
Panel may consent to); or

·    the Scheme does not become Effective by 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).

If any Condition in paragraph 2 of Part A of Appendix 1 to this announcement
is not capable of being satisfied by the date specified therein, Bidco shall
make an announcement through a Regulatory Information Service as soon as
practicable and, in any event, by not later than 8.00 a.m. on the Business Day
following the date so specified, stating whether Bidco has invoked that
Condition, (where applicable) waived that Condition or, with the agreement of
Hipgnosis, specified a new date by which that Condition must be satisfied.

Once the necessary approvals from Hipgnosis Shareholders have been obtained
and the other Conditions have been satisfied or (where applicable) waived and
the Scheme has been approved by the Court, the Scheme will become Effective
upon delivery of a copy of the Court Order to the Guernsey Registrar.

Subject to the satisfaction or (where applicable) waiver of the Conditions,
the Acquisition continues to be expected to complete during the third quarter
of 2024.

Upon the Scheme becoming Effective: (i) it will be binding on all Hipgnosis
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); and (ii) share certificates in respect of
Hipgnosis Shares will cease to be valid and entitlements to Hipgnosis Shares
held within the CREST system will be cancelled. In accordance with the
applicable provisions of the Takeover Code, the consideration for the transfer
of the Hipgnosis Shares to Bidco will be despatched to shareholders no later
than 14 days after the date on which the Scheme becomes Effective (the
"Effective Date").

The Resolution to be proposed at the General Meeting will, amongst other
matters, provide that the Articles be amended to incorporate provisions
requiring any Hipgnosis Shares issued after the Scheme Record Time to be
automatically transferred to Bidco on the same terms as the Acquisition (other
than terms as to timings and formalities). The provisions of the Articles (as
amended) will avoid any person (other than Bidco and their nominees) holding
shares in the capital of Hipgnosis after the Effective Date.

Further details of the Scheme, including expected times and dates for each of
the Court Meeting, the General Meeting and the Sanction Hearing, together with
notices of the Court Meeting and the General Meeting, will be set out in the
Scheme Document. With the consent of the Panel, the Scheme Document and the
forms of proxy accompanying the Scheme Document will be published as soon as
practicable and in any event by no later than 14 June 2024 (or such later date
as Bidco and Hipgnosis may, with the consent of the Panel, agree and, if
required, the Court may approve).

12. Documents

Copies of the following documents will be available promptly, subject to
certain restrictions relating to persons resident in Restricted Jurisdictions,
on Hipgnosis' website at
https://communications.singercm.com/p/4UWI-EVY/blackstone-recommended-offer-hipgnosis
and on Bidco's website at https://www.announcement-documents.com/ in any event
by no later than noon on the Business Day following this announcement:

·    this announcement;

·    the A&R Cooperation Agreement;

·    the documents entered into for the financing of the Acquisition
referred to in paragraph 8 above; and

·    the consent letters from Jefferies, Singer Capital Markets and Shot
Tower to being named in this announcement.

Neither the content of the website referred to in this announcement, nor any
website accessible from any hyperlinks set out in this announcement, are
incorporated into or form part of this announcement.

Subject to certain restrictions relating to persons resident in Restricted
Jurisdictions, the Scheme Document, once published, will also be made
available on Hipgnosis' website at
https://communications.singercm.com/p/4UWI-EVY/blackstone-recommended-offer-hipgnosis
and on Bidco's website at https://www.announcement-documents.com/.

13. General

Bidco reserves the right to elect (with the consent of the Panel and subject
to the terms of the A&R Cooperation Agreement) to implement the
acquisition of the Hipgnosis Shares by means of an Offer as an alternative to
the Scheme. In such event, the Offer will be implemented on substantially the
same terms, other than the Acquisition Price being increased to the price of
the Revised Offer, so far as applicable and subject to appropriate amendments,
as those which would apply to the Initial Offer, including the Acceptance
Condition as set out in the 29 April Announcement.

Investors should be aware that Bidco may purchase Hipgnosis Shares otherwise
than under the Scheme or any Offer, including pursuant to privately negotiated
purchases.

The Acquisition will be on the terms and subject to the conditions set out
herein and in Appendix 1, and to be set out in the Scheme Document. The bases
and sources for certain financial information contained in this announcement
are set out in Appendix 2 of this announcement. Details of irrevocable
undertakings received by Bidco are set out in Appendix 3. The formal Scheme
Document will be sent to Hipgnosis Shareholders by no later than 14 June 2024
(or such later date as Bidco and Hipgnosis may, with the consent of the Panel,
agree and, if required, the Court may approve).

Jefferies (as sole financial adviser to Bidco) and Singer Capital Markets (as
sole financial adviser to Hipgnosis) have each given and not withdrawn their
consent to the publication of this announcement with the inclusion herein of
the references to their names in the form and context in which they appear.

This announcement does not constitute an offer or an invitation to purchase or
subscribe for any securities.

 

This announcement should be read in conjunction with the 29 April Announcement
and in conjunction with, and is subject to, the Appendices to this
announcement and (to the extent applicable) Appendix 3 to the 29 April
Announcement.

Enquiries

 Jefferies (Financial Adviser to Bidco and Blackstone)                         +44 207 029 8000

 Philip Noblet / Chris Cottrell / Harry Le May / Stuart Klein
 Teneo (Financial PR Adviser to Bidco and Blackstone)                          +44 207 260 2700

 James Macey White / Ed Cropley
 Hipgnosis                                                                     +44 207 496 3000

 Robert Naylor, Chairman via Singer Capital Market
 Singer Capital Markets (Sole Rule 3 Adviser, Financial Adviser and Corporate  +44 207 496 3000
 Broker to Hipgnosis)

 James Moat / Alaina Wong / Sam Butcher / Jalini Kalaravy
 Shot Tower Capital LLC (Valuer and Strategic Adviser 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

Kirkland & Ellis International LLP is acting as legal adviser to Bidco
and Blackstone in connection with the Acquisition. Ogier (Guernsey) LLP is
acting as Guernsey legal adviser to Bidco.

Shoosmiths LLP is acting as UK legal adviser in connection with the
Acquisition. Carey Olsen (Guernsey) LLP is acting as Guernsey legal adviser to
Hipgnosis.

Further information

Jefferies International Limited ("Jefferies"), which is authorised and
regulated in the UK by the FCA, is acting as financial adviser to Blackstone
and Bidco and no one else in connection with the matters described in this
announcement and will not be responsible to anyone other than Blackstone and
Bidco for providing the protections offered to clients of Jefferies or for
providing advice in connection with any matter referred to in this
announcement. Neither Jefferies nor any of its affiliates (nor their
respective directors, officers, employees or agents) owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Jefferies in connection with this announcement, any statement
contained herein, the Offer or otherwise. No representation or warranty,
express or implied, is made by Jefferies as to the contents of this
announcement.

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, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of, any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Acquisition or otherwise, nor
shall there be any sale, issuance or transfer of securities of Hipgnosis in
any jurisdiction in contravention of applicable law.  The Acquisition will be
implemented solely pursuant to the terms of the Scheme Document (or, if the
Acquisition is implemented by way of an Offer, the Offer Document), which will
contain the full terms and conditions of the Acquisition, including details of
how to vote in respect of the Acquisition.  Any response in relation to the
Acquisition, or if the Acquisition is implemented by way of a Scheme, any vote
in respect of the Scheme should be made only on the basis of the information
contained in the Scheme Document (or, if the Acquisition is implemented by way
of an Offer, the Offer Document).

This announcement does not constitute a prospectus, prospectus equivalent
document or exempted document.

This announcement contains inside information in relation to Hipgnosis for the
purposes of Article 7 of the Market Abuse Regulation. Hipgnosis' Legal Entity
Identifier is 213800XJIPNDVKXMOC11.

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 independent financial adviser duly authorised under the Financial Services
and Markets Act 2000 (as amended) if you are resident in the United Kingdom
or, if not, from another appropriately authorised independent financial
adviser.

Overseas shareholders

The release, publication or distribution of this announcement in or into
jurisdictions other than the UK may be restricted by law and therefore any
persons who are subject to the law of any jurisdiction other than the UK
should inform themselves of, and observe, any applicable legal or regulatory
requirements.  Any failure to comply with such requirements 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. This announcement has been prepared in accordance
with and for the purpose of complying with English law, Guernsey law, the
Takeover Code, the Market Abuse Regulation and the Disclosure Guidance and
Transparency Rules and information disclosed may not be the same as that which
would have been prepared in accordance with the laws of jurisdictions outside
England.

The availability of the Acquisition to Hipgnosis Shareholders who are not
resident in and citizens of the UK may be affected by the laws of the relevant
jurisdictions in which they are located or of which they are citizens.
Persons who are not resident in the UK should inform themselves of, and
observe, any applicable legal or regulatory requirements of their
jurisdictions.  Any failure to comply with the applicable 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.  Further details in relation to
Overseas Shareholders will be contained in the Scheme Document (or, if the
Acquisition is implemented by way of an Offer, the Offer Document).

Unless otherwise determined by Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, in whole or in part, 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 Acquisition by any such
use, means, instrumentality or from within a Restricted Jurisdiction or any
other jurisdiction if to do so would constitute a violation of the laws of
that jurisdiction.  Copies of this announcement and any formal documentation
relating to the Acquisition are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in or into or
from any Restricted Jurisdiction and persons receiving such documents
(including, without limitation, agents, custodians, nominees and trustees)
must not mail or otherwise forward, distribute or send it in or into or from
any Restricted Jurisdiction.  Doing so may render invalid any related
purported vote in respect of the Acquisition. If the Acquisition is
implemented by way of an Offer (unless otherwise permitted by applicable law
and regulation), the Offer may not be made directly or indirectly, in or into,
or by the use of mails or any means or 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
and the Offer may not be capable of acceptance by any such use, means,
instrumentality or facilities.

Further details in relation to Overseas Shareholders will be included in the
Scheme Document (or, if the Acquisition is implemented by way of an Offer, the
Offer Document).

Notice to U.S. Hipgnosis Shareholders

The Acquisition relates to the shares of a Guernsey company with a listing on
the London Stock Exchange and is being made by means of takeover offer. A
transaction effected by means of a scheme of arrangement is not subject to the
tender offer or proxy solicitation rules under the U.S. Securities Exchange
Act of 1934 (the "U.S. Exchange Act").  Accordingly, the Acquisition is
subject to the disclosure requirements and practices applicable in Guernsey to
takeover offers and schemes of arrangement which differ from the disclosure
requirements of the U.S. tender offer and proxy solicitation rules. The
financial information included in this announcement has been prepared in
accordance with generally accepted accounting principles of the UK and thus
may not be comparable to financial information of U.S. companies or companies
whose financial statements are prepared in accordance with generally accepted
accounting principles in the United States.

If, in the future, Bidco exercises its right to implement the Acquisition by
way of an Offer, which is to be made into the United States, such Offer will
be made in compliance with the applicable U.S. laws and regulations.

It may be difficult for U.S. holders of Hipgnosis Shares to enforce their
rights and any claim arising out of the U.S. federal laws, since Bidco and
Hipgnosis are located in a non-U.S. jurisdiction, and some or all of their
officers and directors may be residents of a non-U.S. jurisdiction.  U.S.
holders of Hipgnosis Shares may not be able to sue a non-U.S. company or its
officers or directors in a non-U.S. court for violations of the U.S.
securities laws.  Further, it may be difficult to compel a non-U.S. company
and its affiliates to subject themselves to a U.S. court's judgement.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the
U.S. Exchange Act, Blackstone or its nominees, or their brokers (acting as
agents), may from time to time make certain purchases of, or arrangements to
purchase, Hipgnosis Shares outside of the U.S., other than pursuant to the
Acquisition, until the date on which completion of the Acquisition occurs,
lapses or is otherwise withdrawn.  Also, in accordance with Rule 14e-5(b) of
the U.S. Exchange Act, Jefferies will continue to act as an exempt principal
trader in Hipgnosis shares on the London Stock Exchange.  These purchases may
occur either in the open market at prevailing prices or in private
transactions at negotiated prices.  Any information about such purchases 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, www.londonstockexchange.com.

U.S. Hipgnosis Shareholders also should be aware that the transaction
contemplated herein may have tax consequences in the U.S. and, that such
consequences, if any, are not described herein.  U.S. Hipgnosis Shareholders
are urged to consult with legal, tax and financial advisers in connection with
making a decision regarding this transaction.

Forward looking statements

This announcement (including information incorporated by reference in this
announcement), statements made regarding the Acquisition, and other
information published by Bidco and Hipgnosis contain statements which are, or
may be deemed to be, "forward-looking statements".  Forward-looking
statements are prospective in nature and are not based on historical facts,
but rather on current expectations and projections of the management of Bidco
and Hipgnosis about future events and are therefore subject to risks and
uncertainties which could cause actual results to differ materially from the
future results expressed or implied by the forward-looking statements.

The forward-looking statements contained in this announcement include
statements relating to the expected effects of the Acquisition on Bidco and
Hipgnosis (including their future prospects, developments and strategies), the
expected timing and scope of the Acquisition and other statements other than
historical facts.  Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as "prepares", "plans",
"expects" or "does not expect", "is expected", "is subject to", "budget",
"projects", "synergy", "strategy", "scheduled", "goal", "estimates",
"forecasts", "cost-saving", "intends", "target", "aims", "anticipates",
"continues", or "does not anticipate", or "believes", or variations of such
words and phrases or statements that certain actions, events or results "may",
"could", "should", "would", "might" or "will" be taken, occur or be
achieved.  Forward looking statements may 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 Bidco's, Hipgnosis', any member of the Bidco
Group's or any member of the Hipgnosis Group's operations and potential
synergies resulting from the Acquisition; and (iii) the effects of global
economic conditions and governmental regulation on Bidco's, Hipgnosis', any
member of the Bidco Group's or any member of the Hipgnosis Group's business.

Although Bidco and Hipgnosis believe that the expectations reflected in such
forward-looking statements are reasonable, Bidco and Hipgnosis can give no
assurance that such expectations will prove to be correct.  By their nature,
forward-looking statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future.  There are
a number of factors that could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other Conditions on the proposed terms and
schedule; changes in the global political, economic, business and competitive
environments and in market and regulatory forces; changes in future exchange
and interest rates; changes in tax rates; future business combinations or
disposals; changes in general economic and business conditions; changes in the
behaviour of other market participants; changes in the anticipated benefits
from the Acquisition not being realised as a result of changes in general
economic and market conditions in the countries in which Bidco and Hipgnosis
operate, weak, volatile or illiquid capital and/or credit markets, changes in
tax rates, interest rate and currency value fluctuations, the degree of
competition in the geographic and business areas in which Bidco and Hipgnosis
operate and changes in laws or in supervisory expectations or requirements.
Other unknown or unpredictable factors could cause actual results to differ
materially from those expected, estimated or projected in the forward-looking
statements.  If any one or more of these risks or uncertainties materialises
or if any one or more of the assumptions proves incorrect, actual results may
differ materially from those expected, estimated or projected. Such
forward-looking statements should therefore be construed in the light of such
factors.  Neither Bidco nor Hipgnosis, nor any of their respective associates
or directors, officers 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.  You are
cautioned not to place any reliance on these forward-looking statements.

Specifically, statements of estimated cost savings and synergies related to
future actions and circumstances which, by their nature, involve risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those
estimated. Due to the scale of the Hipgnosis Group, there may be additional
changes to the Hipgnosis Group's operations. As a result, and given the fact
that the changes relate to the future, the resulting cost synergies may be
materially greater or less than those estimated.

Other than in accordance with their legal or regulatory obligations, neither
Bidco nor Hipgnosis is under any obligation, and Bidco and Hipgnosis expressly
disclaim any intention or obligation, to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

Dealing and opening position disclosure requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% 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) of the Takeover Code
applies must be made by no later than 3.30 pm (London time) on the 10th
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th business day
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% 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 pm (London time) on the business day 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).

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.

Publication on a website

In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
and the documents required to be published under Rule 26 of the Takeover Code
will be made available, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, on Hipgnosis' website at
https://communications.singercm.com/p/4UWI-EVY/blackstone-recommended-offer-hipgnosis
and on Bidco's website at https://www.announcement-documents.com/ by no later
than 12 noon (London time) on the Business Day following this announcement.
For the avoidance of doubt, neither the content of this website nor of any
website accessible from any hyperlinks set out in this announcement are
incorporated by reference or form part of this announcement.

No profit forecasts, estimates or quantified benefits statements

No statement in this announcement is intended as a profit forecast, profit
estimate or quantified benefits statement for any period and no statement in
this announcement should be interpreted to mean that earnings or earnings per
share for Hipgnosis for the current or future financial years would
necessarily match or exceed the historical published earnings or earnings per
share for Hipgnosis.

General

Bidco reserves the right to elect to implement the Acquisition by way of an
Offer as an alternative to the Scheme, subject to the Panel's consent and
(while the A&R Cooperation Agreement is continuing) to the terms of the
A&R Cooperation Agreement.  In such event, such Offer would be
implemented on substantially the same terms and conditions, other than the
Acquisition Price being increased to the price of the Revised Offer, so far as
applicable and subject to appropriate amendments, as those which would apply
to the Initial Offer, including the Acceptance Condition as set out in the 29
April Announcement of such number of Hipgnosis Shares as shall, when
aggregated with Hipgnosis Shares acquired or unconditionally agreed to be
acquired (whether pursuant to the Offer or otherwise) by Bidco, represent
Hipgnosis Shares carrying not less than 55 per cent. of the voting rights then
exercisable at a general meeting of Hipgnosis Shareholders (or such lower
percentage as Bidco may decide), provided that Bidco shall hold or have
acquired or agreed to acquire (whether pursuant to the Offer or otherwise)
directly or indirectly, Hipgnosis Shares carrying in aggregate more than 50
per cent. of the voting rights then normally exercisable at a general meeting
of Hipgnosis.

If the Acquisition is effected by way of an Offer, and such Offer becomes or
is declared unconditional and sufficient acceptances are received in respect
of such Offer, Bidco intends to exercise its rights to apply the provisions of
Part XVIII of the Companies Law so as to acquire compulsorily the remaining
Hipgnosis Shares in respect of which the Offer has not been accepted.

Investors should be aware that Bidco may purchase Hipgnosis Shares otherwise
than under any Scheme or the Offer, including pursuant to privately negotiated
purchases.

Requesting hard copy documents

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.

Electronic communications

Please be aware that addresses, electronic addresses and certain other
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 arithmetic aggregation of figures that precede them.

Disclaimer

The Scheme will be subject to Guernsey law, the jurisdiction of the Court, and
the applicable requirements of the GFSC, the Companies Law, the Takeover Code,
the Panel and the London Stock Exchange.

Appendix 1

Conditions and Further Terms of the Transaction

Part A

Conditions to the Acquisition

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.

Conditions of the Scheme

2.         The Scheme will be subject to the following Conditions:

2.1       (i) its approval by a majority in number representing 75 per
cent. or more of the voting rights of the Scheme Shareholders who are on the
register of members of Hipgnosis (or the relevant class or classes thereof) at
the Voting Record Time, present and voting, whether in person or by proxy, at
the Court Meeting and at any separate class meeting which may be required (or
any adjournment thereof); and (ii) such Court Meeting being held on or before
the 21st day after the expected date of the Court Meeting as set out in the
Scheme Document when published (or such later date, if any, as may be agreed
by Bidco and Hipgnosis or, in a competitive situation, as the Panel may
consent to);

2.2       (i) the Resolution being duly passed at the General Meeting
(or any adjournment thereof); and (ii) such General Meeting being held on or
before the 21st day after the expected date of the General Meeting as set out
in the Scheme Document when published (or such later date, if any, as may be
agreed by Bidco and Hipgnosis or, in a competitive situation, as the Panel may
consent to); and

2.3       (i) the sanction of the Scheme by the Court (with or without
modification (but subject to such modification being acceptable to Bidco and
Hipgnosis)); and (ii) the Sanction Hearing being held on or before the 21st
day after the expected date of the Sanction Hearing when published (or such
later date, if any, as may be agreed by Bidco and Hipgnosis or, in a
competitive situation, as the Panel may consent to (and that the Court may
approve if required)).

General Conditions

3.         In addition, subject as stated in Part B of this
Appendix 1, Bidco and Hipgnosis have agreed that the Acquisition will be
conditional upon the following Conditions and, accordingly, the necessary
actions to complete the Acquisition will not be taken unless the following
Conditions (as amended if appropriate) have been satisfied or, where relevant,
waived:

Anti-trust and regulatory clearances

3.1       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 complete
the Acquisition will not be taken unless the following Conditions (as amended
if appropriate) have been satisfied or, where relevant, waived prior to
completion of the Acquisition:

United Kingdom

3.1.1      insofar as the Competition and Markets Authority ("CMA")
requests information in relation to 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 shall otherwise have cleared the Acquisition pursuant to the Enterprise
Act.

United States of America

3.1.2      in so far as the Acquisition satisfies the applicable
premerger notification thresholds, all necessary notifications and filings in
respect of the Acquisition shall have been made under the United States
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended) (the "HSR
Act") and the regulations promulgated thereunder, and all applicable waiting
periods under the HSR Act and those regulations (including any agreements with
the U.S. Federal Trade Commission or the Antitrust Division of the U.S.
Department of Justice to delay consummation of the Acquisition) shall have
expired, lapsed or been terminated

Notifications, waiting periods and Clearances

3.2       In addition to Condition 3.1 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 complete the Acquisition will not be
taken unless the following Conditions (as amended if appropriate) have been
satisfied or, where relevant, waived prior to completion of the Acquisition:

3.2.1      all material notifications, filings and/or applications which
are deemed by Bidco to be necessary in any relevant jurisdiction under
applicable legislation or regulation having been made and all necessary
waiting and other time periods (including any extensions thereof) 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; and

3.2.2      all other Clearances which are deemed by Bidco to be 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 on terms and in a form reasonably satisfactory to
Bidco from all appropriate Relevant Authorities or (without prejudice to the
generality of the foregoing) 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 Clearances, together with
all Clearances necessary for any member of the Wider Hipgnosis Group to carry
on its business, remaining in full force and effect at the time at which the
Offer becomes otherwise unconditional in all respects, and there being no
notice or intimation of any intention to revoke, suspend, restrict, modify or
not to renew such Clearances;

General Regulatory

3.3       No Relevant Authority, having given notice of a decision to
take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference (and, in each case, without having
withdrawn the same), or having required any action to be taken or otherwise
having done anything or having enacted, issued, made or proposed any statute,
regulation, decision or order or change to published practice and there not
continuing to be outstanding or in effect any statute, regulation, decision or
order, whether temporary, preliminary or permanent, which has the effect of or
might:

3.3.1      make the Acquisition, its implementation or the acquisition or
proposed acquisition of any shares or other securities (or the equivalent) in,
or control or management of, any member of the Wider Hipgnosis Group by any
member of the Wider Bidco Group and/ or its implementation void, voidable,
illegal and/or unenforceable under the laws of any relevant jurisdiction, or
otherwise directly or indirectly prevent, prohibit, or restrain, restrict,
materially delay or otherwise materially interfere with the implementation of,
or impose material additional conditions or obligations with respect to, or
otherwise challenge, impede or 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, any member of the Wider
Hipgnosis Group by any member of the Wider Bidco Group;

3.3.2      require, prevent or materially delay the divestiture or alter
the terms envisaged for such 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 businesses (or any part
thereof) or to own, control or manage any of their assets or properties (or
any part thereof);

3.3.3      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 or hold or to exercise effectively all or any rights of
ownership in respect of shares or other securities (or the equivalent) in
Hipgnosis (or any member of the Wider Hipgnosis 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 any rights of ownership
in respect of shares or other securities (or the equivalent) in, or to
exercise management control over, any member of the Wider Hipgnosis Group;

3.3.4      other than in the context of the Offer or, if applicable, the
Companies Law, require any member of the Wider Bidco Group or the Wider
Hipgnosis Group to acquire or offer to acquire any shares, other securities
(or the equivalent) or interest in any member of the Wider Hipgnosis Group or
any asset owned by any third party;

3.3.5      require, prevent or materially delay a 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 any
member of the Wider Hipgnosis Group;

3.3.6      result in any member of the Wider Hipgnosis Group ceasing to
be able to carry on business under any name under which it presently carries
on business;

3.3.7      impose any material 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 their respective businesses 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

3.3.8      except as Disclosed, otherwise adversely affect the business,
assets, financial or trading position or prospects of any member of the Wider
Hipgnosis Group or any member of the Wider Bidco Group.

Confirmation of absence of adverse circumstances

3.4       except as Disclosed, there being no provision of any
arrangement, agreement, licence, permit, franchise, lease 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 be
subject or any event or circumstance which, as a consequence of the
Acquisition or the proposed acquisition by any member of the Wider Bidco Group
of any shares or other securities in Hipgnosis or because of a change in the
control or management of any member of the Wider Hipgnosis Group or otherwise,
would or might reasonably be expected to result in, in each case to an extent
which is material in the context of the Wider Hipgnosis Group taken as a whole
or to the financing of the Acquisition:

3.4.1      any monies borrowed by, or any other indebtedness, 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 prior to 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;

3.4.2      the rights, liabilities, obligations, interests or business of
any member of the Wider Hipgnosis Group or any member of the Wider Bidco Group
under any such arrangement, agreement, licence, permit, lease or instrument or
the interests or business of any member of the Wider Hipgnosis Group or any
member of the Wider Bidco Group in or with any other firm or company or body
or person (or any agreement or arrangement relating to any such business or
interests) being or likely to become terminated or adversely modified or
affected or any onerous obligation or liability arising or any adverse action
being taken or arising thereunder;

3.4.3      any member of the Wider Hipgnosis Group ceasing to be able to
carry on business under any name under which it presently carries on business
to an extent which is material in the context of the Hipgnosis Group taken as
a whole or in the context of the Acquisition;

3.4.4      any assets or interests of, 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 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;

3.4.5      other than in the ordinary course of business, the creation or
enforcement of any mortgage, charge or other security interest over the whole
or any part of the business, property or assets of any member of the Wider
Hipgnosis Group or any such mortgage, charge or other security interest
(whenever created, arising or having arisen), becoming enforceable;

3.4.6      the business, assets, value, financial or trading position,
profits, prospects or operational performance of any member of the Wider
Hipgnosis Group being prejudiced or adversely affected;

3.4.7      the creation or acceleration of any material 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

3.4.8      any liability of any member of the Wider Hipgnosis Group to
make any severance, termination, bonus or other payment to any of its
directors or other officers other than in the ordinary course of business;

No material transactions, claims or changes in the conduct of the business of
the Hipgnosis Group

3.5       except as Disclosed, no member of the Wider Hipgnosis Group
having since 31 March 2023:

3.5.1      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 securities convertible into, or exchangeable
for, or rights, warrants or options to subscribe for or acquire, any such
shares 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);

3.5.2      recommended, declared, paid or made or agreed to recommend,
declare, pay or make any bonus issue, dividend or other distribution (whether
payable in cash or otherwise) other than to Hipgnosis or one of its
wholly‑owned subsidiaries;

3.5.3      save as between Hipgnosis and its wholly‑owned subsidiaries
or between such wholly‑owned subsidiaries, merged with (by statutory merger
or otherwise) or demerged from or acquired any body corporate, partnership or
business or acquired or disposed of, or, other than in the ordinary course of
business, transferred, mortgaged or charged or created any security interest
over, any assets or any right, title or interest in any asset (including
shares and trade investments) or authorised, proposed or announced any
intention to do so, in each case to an extent which is material in the context
of the Wider Hipgnosis Group taken as a whole;

3.5.4      save as between Hipgnosis and its wholly‑owned subsidiaries
or between such wholly‑owned subsidiaries, made, authorised, proposed or
announced an intention to propose any change in its loan capital other than in
the ordinary course of business and to an extent which is material in the
context of the Wider Hipgnosis Group taken as a whole;

3.5.5      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 (save in the ordinary course of business and save as between
Hipgnosis and its wholly‑owned subsidiaries or between such wholly‑owned
subsidiaries) incurred or increased any indebtedness or become subject to any
contingent liability to an extent which is material in the context of the
Wider Hipgnosis Group taken as a whole or in the context of the Acquisition;

3.5.6      entered into, varied, authorised or proposed entry into or
variation of, or announced its intention to enter into or vary, any contract,
transaction, arrangement or commitment (whether in respect of capital
expenditure or otherwise) (otherwise than in the ordinary course of business)
which is of a long-term, unusual or onerous nature, or which involves or could
reasonably be expected to involve an obligation of a nature or magnitude which
is or is likely to be materially restrictive on the business of any member of
the Wider Hipgnosis Group to an extent which is or is reasonably likely to be
material to the Wider Hipgnosis Group taken as a whole;

3.5.7      entered into any licence or other disposal of intellectual
property rights of any member of the Wider Hipgnosis Group which are material
in the context of the Wider Hipgnosis Group and outside the normal course of
business;

3.5.8      entered into, varied, authorised or proposed entry into or
variation of, or announced its intention to enter into or vary the terms of or
made any offer (which remains open for acceptance) to enter into or vary the
terms of, any contract, commitment, arrangement or any service agreement with
any director or senior executive of the Wider Hipgnosis Group save for salary
increases, bonuses or variations of terms in the ordinary course;

3.5.9      (i) (excluding the trustee of any pension scheme(s)
established by a member of the Wider Hipgnosis Group other than Hipgnosis
itself) made, agreed or consented to or procured any significant change to:
(a) the terms of any existing trust deeds, rules, policy or other governing
documents, or entered into or established any new trust deeds, rules, policy
or other governing documents, constituting any pension scheme or other
retirement or death benefit arrangement established for the directors, former
directors, employees or former employees of any entity in the Wider Hipgnosis
Group or their dependants and established by a member of the Wider Hipgnosis
Group (a "Relevant Pension Plan"); (b) the basis on which benefits accrue,
pensions which are payable or the persons entitled to accrue or be paid
benefits, under any Relevant Pension Plan; (c) the basis on which the
liabilities of any Relevant Pension Plan are funded or valued; or (d) the
basis or rate of employer contribution to a Relevant Pension Plan, in each
case to the extent which is material in the context of the Wider Hipgnosis
Group taken as a whole or in the context of the Acquisition and other than as
required in accordance with applicable law; or (ii) enter into or propose to
enter into one or more bulk annuity contracts in relation to any Relevant
Pension Plan; or (iii) carried out any act: (a) which would or could
reasonably be expected to lead to the commencement of the winding up of any
Relevant Pension Plan; (b) which would or is reasonably likely to create a
material debt owed by an employer to any Relevant Pension Plan; (c) which
would or might accelerate any obligation on any employer to fund or pay
additional contributions to any Relevant Pension Plan; or (d) which would,
having regard to the published guidance of the Pensions Regulator give rise
directly or indirectly to a liability in respect of a Relevant Pension Plan
arising out of the operation of sections 38 and 38A of the Pensions Act 2004
in relation to a Relevant Pension Plan, in each case to the extent which is
material in the context of the Wider Hipgnosis Group taken as a whole or in
the context of the Acquisition and other than as required in accordance with
applicable law;

3.5.10    changed the trustee or trustee directors or other fiduciary of
any Relevant Pension Plan;

3.5.11    entered into, implemented or effected, or authorised, proposed or
announced its intention to implement or effect, any joint venture, asset or
profit sharing arrangement, partnership, composition, assignment,
reconstruction, amalgamation, commitment, scheme or other transaction or
arrangement (other than the Offer) otherwise than in the ordinary course of
business which is material in the context of the Wider Hipgnosis Group taken
as a whole or in the context of the Acquisition;

3.5.12    purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
made any other change to any part of its share capital to an extent which
(other than in the case of Hipgnosis) is material in the context of the Wider
Hipgnosis Group taken as a whole;

3.5.13    other than with respect to claims between Hipgnosis and its
wholly owned subsidiaries (or between such subsidiaries), waived, compromised
or settled any claim otherwise than in the ordinary course of business which
is material in the context of the Wider Hipgnosis Group taken as a whole or in
the context of the Acquisition;

3.5.14    made any alteration to its articles of incorporation or other
constitutional documents (in each case, other than in connection with the
Offer) which is material in the context of the Acquisition;

3.5.15    (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, 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 any administrator, receiver, manager,
administrative receiver, trustee or similar officer of all or any of its
assets or revenues or any analogous proceedings in any jurisdiction or
appointed any analogous person in any jurisdiction or had any such person
appointed which is material in the context of the Wider Hipgnosis Group taken
as a whole or in the context of the Acquisition;

3.5.16    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 which is material in the context of the Wider Hipgnosis Group taken
as a whole or in the context of the Acquisition;

3.5.17    entered into any contract, commitment, agreement or arrangement
otherwise than in the ordinary course of business 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;

3.5.18    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 be expected to have a material adverse effect on
the financial position of the Wider Hipgnosis Group taken as a whole; or

3.5.19    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 material adverse change

3.6       since 31 March 2023, and except as Disclosed, there having
been:

3.6.1      no adverse change and no circumstance having arisen which
would be expected to result in any adverse change or deterioration in the
business, assets, value, financial or trading position, profits, prospects or
operational performance of any member of the Wider Hipgnosis Group to an
extent which is material to the Wider Hipgnosis Group taken as a whole or to
the financing of the Acquisition;

3.6.2      no litigation, arbitration proceedings, prosecution or other
legal proceedings including, without limitation, with regard to intellectual
property rights used by the Wider Hipgnosis Group having been threatened,
announced or instituted by or against or remaining outstanding against 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 or defendant or
otherwise) which, in any such case, might be expected to have a material
adverse effect on the Wider Hipgnosis Group taken as a whole, and no enquiry,
review, investigation or enforcement proceedings by, or complaint or reference
to, any Relevant Authority against or in respect of any member of the Wider
Hipgnosis Group having been threatened, announced or instituted by or against,
or remaining outstanding in respect of, any member of the Wider Hipgnosis
Group which, in any such case, might be expected to have a material adverse
effect on the Wider Hipgnosis Group taken as a whole;

3.6.3      no contingent or other liability having arisen, increased or
become apparent which is reasonably likely to adversely affect the business,
assets, financial or trading position, profits, prospects or operational
performance of any member of the Wider Hipgnosis Group to an extent which is
material to the Wider Hipgnosis Group taken as a whole;

3.6.4      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 held by any member of the Wider
Hipgnosis Group, which is necessary for the proper carrying on of its business
and the withdrawal, cancellation, termination or modification of which is
material and reasonably likely to have a material adverse effect on the Wider
Hipgnosis Group taken as a whole; and

3.6.5      no member of the Wider Hipgnosis Group having conducted its
business in material breach of any applicable laws and regulations which in
any case is material in the context of the Wider Hipgnosis Group taken as a
whole;

3.7       since 31 March 2023, except as Disclosed, Bidco not having
discovered:

3.7.1      that any financial, business or other information concerning
the Wider Hipgnosis Group publicly announced or disclosed to any member of the
Wider Bidco Group at any time prior to the date of this announcement by or on
behalf of any member of the Wider Hipgnosis Group or to any of their advisers
is misleading, contains a misrepresentation of fact or omits to state a fact
necessary to make that information not misleading and which is, in any case,
material in the context of the Wider Hipgnosis Group taken as a whole or in
the context of the Acquisition;

3.7.2      that any member of the Wider Hipgnosis Group is subject to any
liability, contingent or otherwise and which is material in the context of the
Wider Hipgnosis Group taken as a whole; or

3.7.3      any information which affects the import of any information
disclosed to Bidco at any time prior to the date of this announcement by or on
behalf of any member of the Wider Hipgnosis Group which is material in the
context of the Wider Hipgnosis Group taken as a whole;

Environmental liabilities

3.8       since 31 March 2023, except as Disclosed, Bidco not having
discovered that, in relation to any release, emission, accumulation,
discharge, disposal or other similar circumstance which has impaired or is
likely to impair the environment (including property) or harmed or is likely
to harm the health of humans, animals or other living organisms or
eco‑systems, no past or present member of the Wider Hipgnosis Group, in a
manner or to an extent which is material in the context of the Wider Hipgnosis
Group, (i) having committed any violation of any applicable laws, statutes,
regulations, Clearances, notices or other requirements of any Relevant
Authority giving rise to a material liability; and/or (ii) having incurred
any material liability (whether actual or contingent) to any Relevant
Authority; and/or (iii) being likely to incur any material liability (whether
actual or contingent), or being required, to make good, remediate, repair,
re‑instate or clean up the environment (including any property) in each case
of (i), (ii) or (iii) which such liability or requirement would be material to
the Wider Hipgnosis Group taken as a whole;

Intellectual property

3.9       except as Disclosed, no circumstance having arisen or event
having occurred in relation to any intellectual property owned or used by any
member of the Wider Hipgnosis Group which would be reasonably likely to have a
material adverse effect on the Wider Hipgnosis Group taken as a whole or is
otherwise material in the context of the Acquisition, including:

3.9.1      any member of the Wider Hipgnosis Group losing its title to
any intellectual property material to its business, or any intellectual
property owned by the Wider Hipgnosis Group and material to its business being
revoked, cancelled or declared invalid;

3.9.2      any claim being asserted in writing or threatened in writing
by any person challenging the ownership of any member of the Wider Hipgnosis
Group to, or the validity or effectiveness of, any of its intellectual
property; or

3.9.3      any agreement regarding the use of any intellectual property
licensed to or by any member of the Wider Hipgnosis Group being terminated or
varied;

Anti‑corruption and sanctions

3.10     except as Disclosed, Bidco not having discovered that (to an
extent that is material in the context of the Wider Hipgnosis Group taken as a
whole):

3.10.1    any past or present member of the Wider Hipgnosis Group or any
person that performs or has performed services for or on behalf of any such
company is or has at any time engaged in any activity, practice or conduct (or
omitted to take any action) in contravention of the UK Bribery Act 2010, the
U.S. Foreign Corrupt Practices Act of 1977, as amended or any other applicable
anti‑corruption legislation;

3.10.2    any member of the Wider Hipgnosis Group is ineligible to be
awarded any contract or business under section 23 of the Public Contracts
Regulations 2006 or section 26 of the Utilities Contracts Regulations 2006
(each as amended);

3.10.3    any past or present member of the Wider Hipgnosis Group has
engaged in any activity or business with, or made any investments in, or made
any payments to any government, entity or individual covered by any of the
economic sanctions administered by the United Nations or the European Union
(or any of their respective member states) or the United States Office of
Foreign Assets Control or any other governmental or supranational body or
authority in any jurisdiction; or

3.10.4    a member of the Hipgnosis Group has engaged in a transaction
which would cause the Bidco Group to be in breach of any law or regulation on
completion of the Acquisition, including the economic sanctions administered
by the United States Office of Foreign Assets Control or HM Treasury &
Customs or any government, entity or individual targeted by any of the
economic sanctions of the United Nations, United States or the European Union
or any of its member states; or

No criminal property

3.11     except as Disclosed, Bidco not having discovered that 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).

 

Part B

Further terms of the Acquisition

1.         Subject to the requirements of the Panel and 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 of Appendix 1, except
Condition 1, 2.1(i), 2.2(i) and 2.3(i) which cannot be waived. If any of
Conditions 1, 2.1(i), 2.2(i) and 2.3(i) is not satisfied by the relevant
deadline specified in the relevant Condition, Bidco shall make an announcement
by 8.00 a.m. 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.

2.         Bidco shall 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 in Part A of Appendix 1 above that are capable of waiver
by a date earlier than the latest date for the fulfilment 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 fulfilment.

3.         Under Rule 13.5(a) of the Takeover Code and subject to
paragraph 4, 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.  This will be judged by reference to
the facts of each case at the time that the relevant circumstances arise.

4.         Condition  1 (subject to Rule 12 of the Takeover Code),
Conditions 2.1, 2.2 and 2.3 in Part A of Appendix 1 above, and, if
applicable, any valid acceptance condition if the Acquisition is implemented
by means of an Offer, are not subject to Rule 13.5(a) of the Takeover Code.

5.         Any Condition that is subject to Rule 13.5(a) of the
Takeover Code may be waived by Bidco.

6.         If the Panel requires Bidco to make an offer or offers for
Hipgnosis Shares under the provisions of Rule 9 of the Takeover Code, Bidco
may make such alterations to the Conditions as are necessary to comply with
the provisions of that Rule.

7.         Bidco reserves the right to elect to implement the
Acquisition by way of an Offer as an alternative to the Scheme, subject to the
Panel's consent and (while the A&R Cooperation Agreement is continuing) to
the terms of the A&R Cooperation Agreement. In such an event, such Offer
will be implemented on the same terms and conditions, other than the
Acquisition Price being increased to the price of the Revised Offer, so far as
is applicable and subject to appropriate amendments, as those which would
apply to the Initial Offer, including the Acceptance Condition as set out in
the 29 April Announcement, of such number of Hipgnosis Shares as shall, when
aggregated with Hipgnosis Shares acquired or unconditionally agreed to be
acquired (whether pursuant to the Offer or otherwise) by Bidco, represent
Hipgnosis Shares carrying not less than 55 per cent. of the voting rights then
exercisable at a general meeting of Hipgnosis Shareholders (or such lower
percentage as Bidco may decide), provided that Bidco shall hold or have
acquired or agreed to acquire (whether pursuant to the Offer or otherwise)
directly or indirectly, Hipgnosis Shares carrying in aggregate more than 50
per cent. of the voting rights then normally exercisable at a general meeting
of Hipgnosis. If the Acquisition is effected by way of an Offer, and such
Offer becomes or is declared unconditional and sufficient acceptances are
received in respect of such Offer, Bidco intends to exercise its rights to
apply the provisions of Part XVIII of the Companies Law so as to acquire
compulsorily the remaining Hipgnosis Shares in respect of which the Offer has
not been accepted.

8.         The Acquisition will be subject, inter alia, to the
Conditions and certain further terms which are set out in this Appendix 1 and
to the full terms which will be set out in the Offer Document and such further
terms as may be required to comply with the provisions of the Takeover Code
and the applicable requirements of the Panel and the London Stock Exchange.

9.         Hipgnosis Shares will be acquired by Bidco pursuant to the
Acquisition fully paid and free from all liens, charges, encumbrances and
other third party rights of any nature whatsoever and together with all rights
attaching to them as at completion of the Acquisition, including the right to
receive and retain all dividends and distributions (if any) declared, made or
paid after completion of the Acquisition.

10.       If, on or after the date of this announcement and prior to
completion of the Acquisition, any dividend and/or distribution is announced,
declared, made or paid in respect of the Hipgnosis Shares with a record date
prior to completion of the Acquisition, Bidco reserves the right to reduce the
consideration payable under the terms of the Acquisition for the Hipgnosis
Shares by an amount up to the aggregate amount of such dividend and/or
distribution, in which case any reference in this announcement to the
consideration payable under the terms of the Acquisition will be deemed to be
a reference to the consideration as so reduced. Any exercise by Bidco of its
rights referred to in this paragraph 10 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 Offer or the Acquisition. In
such circumstances, Hipgnosis Shareholders would be entitled to retain any
such dividend or distribution.

11.       The availability of the Acquisition to persons not resident in
the United Kingdom may be affected by the laws or regulatory requirements of
the relevant jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable requirements.

12.       The Scheme will be governed by Guernsey law and be subject to
the jurisdiction of the Court, to the Conditions set out above and full terms
to be set out in the Offer Document. The Acquisition will be subject to the
applicable requirements of the GFSC, the Companies Law, the Panel and the
London Stock Exchange.

 

13.       Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.

Appendix 2

Sources and Bases of Information

In this announcement, unless otherwise stated or the context otherwise
requires, the following sources and bases have been used.

1.         The fully diluted issued ordinary share capital of
1,211,214,286 Hipgnosis Shares (of which 2,000,000 are held in treasury) is
based on 1,209,214,286 Hipgnosis Shares in issue as at 31 May 2024 (being the
latest practicable date before this announcement).

2.         A value of approximately $1,584 million for the entire
issued and to be issued share capital of Hipgnosis is based on:

2.1       the Revised Offer Price of $1.31 per Hipgnosis Share; and

2.2       Hipgnosis' fully diluted issued ordinary share capital of
1,211,214,286 Hipgnosis Shares (of which 2,000,000 are held in treasury), as
set out in paragraph 1 above.

3.         Unless otherwise stated, the financial information of
Hipgnosis is extracted (without material adjustment) from the annual report
and audited accounts of the Hipgnosis Group for the 12 months ended 31 March
2023, and the unaudited, consolidated financial statements of Hipgnosis for
the six months ended 30 September 2023.

4.         The volume-weighted average prices have been derived from
Bloomberg.

5.         Certain figures included in this announcement have been
subject to rounding adjustments.

 

Appendix 3

Details of Irrevocable Undertakings

1.         Hipgnosis Directors

The following Hipgnosis Directors have given irrevocable undertakings to vote
(or procure the voting) in favour of the Scheme at the Court Meeting and the
Resolution at the General Meeting (or in the event that the Acquisition is
implemented by way of an Offer, to accept, or procure the acceptance of, the
Offer) in respect of their own beneficial holdings (or those Hipgnosis Shares
over which they have control) of Hipgnosis Shares:

 Name              Total Number of    Percentage of existing issued share capital

Hipgnosis Shares
 Robert Naylor     100,000            0.008
 Simon Holden      150,796            0.012
 Francis Keeling   50,000             0.004
 Cindy Rampersaud  27,000             0.002
 Total             327,796            0.027

 

These irrevocable undertakings also extend to any Hipgnosis Shares acquired by
the Hipgnosis Directors.

The irrevocable undertakings referred to in this paragraph 1 cease to be
binding on the earlier of the following occurrences: (i) the Scheme Document
is not sent to Hipgnosis Shareholders within the permitted period under the
Takeover Code or as otherwise agreed with the Panel; (ii) the Scheme or the
Resolution is not approved by the requisite majority of the Hipgnosis
Shareholders at the General Meeting or the Court Meeting; (iii) the Scheme
lapses or is withdrawn in accordance with its terms where: (A) the Scheme has
not been withdrawn or lapsed as a result of Bidco exercising its right to
implement the Acquisition by way of an Offer in accordance with the Takeover
Code rather than by way of a Scheme; and (B) a new, revised or replacement
Scheme or Offer is or has been announced in accordance with Rule 2.7 of the
Takeover Code at the same time; (iv) the Scheme has not become Effective by
11.59 p.m. on the Long Stop Date; or (v) the date on which any competing offer
for the entire issued, and to be issued, share capital of Hipgnosis is
declared unconditional or, if proceeding by way of a scheme of arrangement,
becomes Effective.

2.         Close relatives of certain Hipgnosis Directors

The following Hipgnosis Shareholders, being close relatives of certain
Hipgnosis Directors, have given irrevocable undertakings to vote (or procure
the voting) in favour of the Scheme at the Court Meeting and the Resolutions
at the General Meeting (or in the event that the Acquisition is implemented by
way of an Offer, to accept, or procure the acceptance of, the Offer) in
respect of their own beneficial holdings (or those Hipgnosis Shares over which
they have control) of Hipgnosis Shares:

 Name            Total Number of    Percentage of existing issued share capital

Hipgnosis Shares
 Emilie Keeling  50,000             0.004
 Total           50,000             0.004

 

These irrevocable undertakings also extend to any Hipgnosis Shares acquired by
such Hipgnosis Shareholders.

The irrevocable undertakings referred to in this paragraph 2 cease to be
binding on the earlier of the following occurrences: (i) the Scheme Document
is not sent to Hipgnosis Shareholders within the permitted period under the
Takeover Code or as otherwise agreed with the Panel; (ii) the Scheme or the
Resolution is not approved by the requisite majority of the Hipgnosis
Shareholders at the General Meeting or the Court Meeting; (iii) the Scheme
lapses or is withdrawn in accordance with its terms where: (A) the Scheme has
not been withdrawn or lapsed as a result of Bidco exercising its right to
implement the Acquisition by way of an Offer in accordance with the Takeover
Code rather than by way of a Scheme; and (B) a new, revised or replacement
Scheme or Offer is or has been announced in accordance with Rule 2.7 of the
Takeover Code at the same time; (iv) the Scheme has not become Effective by
11.59 p.m. on the Long Stop Date; or (v) the date on which any competing offer
for the entire issued, and to be issued, share capital of Hipgnosis is
declared unconditional or, if proceeding by way of a scheme of arrangement,
becomes Effective.

 

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