REG - Alchemy Copyrights Hipgnosis Songs Fund Hipgnosis Songs-SOND Hipgnosis Songs-SONC - Recommended increased cash offer for Hipgnosis

Hipgnosis Songs FundAnnouncement

24/04/2024 18:30

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RNS Number : 9316L  Alchemy Copyrights, LLC  24 April 2024

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

FOR IMMEDIATE RELEASE

24 April 2024

RECOMMENDED INCREASED CASH OFFER FOR

HIPGNOSIS SONGS FUND LIMITED ("HIPGNOSIS")

BY

CONCORD CHORUS LIMITED ("CONCORD BIDCO")

an entity indirectly controlled by Alchemy Copyrights, LLC, trading as Concord
("Concord")

 

Increased Cash Consideration of US$1.25 per Hipgnosis Share

Hipgnosis Directors re-confirm unanimous recommendation

 

 
1          Introduction

On 18 April 2024, the boards of Concord Bidco and Hipgnosis announced that
they had reached agreement on the terms of a recommended cash offer (the
"Original Concord Offer") pursuant to which Concord Bidco, a wholly-owned
subsidiary of Alchemy Copyrights, LLC, trading as Concord ("Concord"), would
acquire the entire issued and to be issued share capital of Hipgnosis (the
"Acquisition") to be effected by means of a Court-sanctioned scheme of
arrangement between Hipgnosis and relevant Hipgnosis Shareholders under Part
VIII of the Companies (Guernsey) Law, 2008 (as amended) (the "Scheme") (the
"Rule 2.7 Announcement").

The Original Concord Offer was announced after extensive negotiations between
the Hipgnosis Board and Concord Bidco. However, Concord Bidco notes the
announcement on 20 April 2024 made by Blackstone Europe LLP (acting as
sub-advisor to certain Blackstone Funds) of its possible counter-offer for
Hipgnosis. Concord Bidco remains committed to becoming the new owner of
Hipgnosis. Accordingly, Concord Bidco has engaged with the Hipgnosis Board and
its advisers in relation to the value of the Original Concord Offer.

Today, the boards of Concord Bidco and Hipgnosis are pleased to announce that
they have reached agreement on the terms of an increased cash offer at an
increased price of US$1.25 for each Scheme Share (the "Increased Concord
Offer") for the entire issued and to be issued share capital of Hipgnosis,
which has been unanimously recommended by the Hipgnosis Board. The Cash
Consideration of US$1.16 plus Contingent Consideration which was payable in
accordance with the terms of the Original Concord Offer will therefore
increase to US$1.25 with no Contingent Consideration payable under the
Increased Concord Offer.

The Hipgnosis Directors believe that the Increased Concord Offer is in the
best interests of Hipgnosis Shareholders as a whole, and accordingly
unanimously recommend that Hipgnosis Shareholders vote in favour of the
resolutions required to implement the Increased Concord Offer to be proposed
at the Court Meeting and the General Meeting which are due to be held on or
around 10 June 2024.

Capitalised terms used and not defined in this Announcement have the meanings
given to them in the Rule 2.7 Announcement.

2          increased concord offer

Under the terms of the Increased Concord Offer, Hipgnosis Shareholders will be
entitled to receive:

US$1.25 in cash for each Scheme Share

The Increased Concord Offer values the entire issued and to be issued ordinary
share capital of Hipgnosis at approximately US$1,511.5 million. The Increased
Concord Offer represents an increase of approximately 7.8 per cent to the
offer value under the Original Concord Offer.

The Increased Concord Offer is equivalent to £1.01 per Share based on the
Increased Offer Announcement Exchange Rate.

The Increased Concord Offer represents a premium of:

·      42.6 per cent. to the Closing Price of £0.71 on 17 April 2024
(being the last Business Day prior to the commencement of the Offer Period);

·      47.3 per cent. to the six-month volume weighted average price per
Hipgnosis Share of £0.68 to 17 April 2024 (being the last Business Day prior
to the commencement of the Offer Period); and

·      12.4 per cent. to Hipgnosis' Adjusted 30 September 2023 Operative
NAV per Hipgnosis Share of US$1.11.

 

The terms of the Acquisition are based on the assumption that no dividends or
other distributions will be authorised, declared or paid on or before the
Effective Date. Concord Bidco reserves the right to reduce the price payable
for each Scheme Share pursuant to the Acquisition by up to the amount per
Scheme Share of any dividends or distributions authorised, declared or paid on
or before the Effective Date.

 

3          recommendation

The Hipgnosis Directors, who have been so advised by Singer Capital Markets as
to the financial terms of the Increased Concord Offer, unanimously consider
the terms of the Increased Concord Offer 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.

The Hipgnosis Directors intend to recommend unanimously that Scheme
Shareholders vote in favour of the Scheme at the Court Meeting and that
Hipgnosis Shareholders vote in favour of the Resolution at the General Meeting
(or, in the event that the Acquisition is implemented by way of a Takeover
Offer, that Hipgnosis Shareholders accept or procure acceptance of the
Takeover Offer), and have irrevocably undertaken to do so in respect of their
own beneficial holdings totalling in aggregate 327,796 Hipgnosis Shares,
representing approximately 0.03 per cent. of the issued share capital of
Hipgnosis as at the close of business on 24 April 2024.

Further details of these irrevocable undertakings are set out in Appendix 2 to
this Announcement.

4          irrevocable undertakings

As described in the Rule 2.7 Announcement, in addition to the irrevocable
undertakings given by the Hipgnosis Directors as set out above, Concord Bidco
has also received irrevocable undertakings (which remain binding in relation
to the Increased Concord Offer) from certain Hipgnosis Shareholders and a
letter of intent from Investec Wealth & Investment Management Limited.

In addition to the irrevocable undertakings and the letters of intent set out
in the Rule 2.7 Announcement, Concord Bidco has received further irrevocable
undertakings from KL Special Opportunities Master Fund Limited, KL UCITS ICAV
- KL Event Driven UCITS Fund and Josh Gruss to support the Increased Concord
Offer in relation to an aggregate of 29,893,227 Hipgnosis Shares, representing
approximately 2.47 per cent of the issued share capital of Hipgnosis.

As announced on 23 April 2024, Concord Bidco was advised by J O Hambro on 22
April 2024 that it has disposed of 5,417,761 of the Hipgnosis Shares subject
to its irrevocable undertaking and it has today  sold a further 1,558,013
Hipgnosis Shares (together the "Sold Shares") and are no longer in a position
to vote the Sold Shares in favour of the Scheme at the Court Meeting and in
favour of the Resolution to be proposed at the General Meeting.

Therefore, the total number of Hipgnosis Shares which are subject to
irrevocable undertakings or letters of intent received by Concord Bidco in
relation to Hipgnosis Shares is 378,162,890 Hipgnosis Shares, representing, in
aggregate, approximately 31.27 per cent of the issued share capital of
Hipgnosis as at the close of business on 24 April 2024 (being the latest
practicable date prior to the date of this Announcement).

Further details of the irrevocable undertakings and letters of intent given to
Concord Bidco (and the circumstances in which such arrangements will cease to
be binding or otherwise fall away) are set out in Appendix 2 to this
Announcement.

5          intentions for Hipgnosis

The Increased Concord Offer does not change Concord Bidco's intentions as
regards Hipgnosis as set out in the Rule 2.7 Announcement, save that Concord
Bidco now intends to sell up to 30 per cent of Hipgnosis' assets within a
period of 18 to 24 months following completion of the Acquisition.

6          Financing of the acquisition

The Acquisition, including the additional amount of US$108.8 million payable
pursuant to the Increased Concord Offer, will continue to be financed by a
combination of debt and equity financing. The majority of the equity financing
will be provided by Concord with minority participation by the Apollo Funds,
and the debt financing will be provided by the Apollo Funds.

J.P. Morgan Cazenove, as financial advisor to Concord Bidco, is satisfied that
sufficient resources are available to Concord Bidco to enable it to satisfy in
full the Cash Consideration under the terms of the Acquisition, including the
additional amount payable pursuant to the Increased Concord Offer.

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

7          CONDITIONS
The implementation of the Scheme will be subject to the Conditions and further terms set out in Appendix 1 to the Rule 2.7 Announcement and all terms and conditions, including the increased price payable by Concord Bidco for the Scheme Shares, will be set out in full in the Scheme Document which will be sent to Scheme Shareholders as soon as practicably possible.
8          DISCLOSURES
Concord Bidco confirms that there have been no changes to:
·      the Offer-Related Arrangements disclosed in section 12 of the Rule 2.7 Announcement; and
·      the Disclosure of Interests in Hipgnosis in Section 13 of the Rule 2.7 Announcement.
9          General

Each of J.P. Morgan Cazenove, Singer Capital Markets and Shot Tower has given
and not withdrawn its consent to the publication of this Announcement with the
inclusion herein of the references to its name in the form and context in
which it appears.

The Appendix to this Announcement contains the sources and bases of certain
information contained in this Announcement.

10         Documents available on website

Copies of the following documents will be made available on
https://communications.singercm.com/p/4UWI-ETV/recommended-cash-offer-hipgnosis
and on Concord Bidco's website at www.projectchorus.com by no later than 12.00
p.m. London time on the Business Day following this Announcement until the end
of the Acquisition:

·      a copy of this Announcement;

·      documents relating to Concord Bidco's financing of the Increased
Concord Offer; and

·      the written consents of J.P. Morgan, Singer Capital Markets and
Shot Tower to being named in this Announcement.

Commenting on the Increased Concord Offer, Bob Valentine, CEO of Concord,
said:

"We are pleased to announce this increased offer for Hipgnosis, which has
again been unanimously recommended by its Board and has the support of
shareholders representing 31.27 per cent of Hipgnosis' issued share capital.
We continue to believe that this is the best outcome for Hipgnosis
shareholders as it provides them with the opportunity to realise their
investment in cash at a significant premium to the price where the shares were
trading before our bid last week."

Enquiries:

Concord
 
+1 629 401 3906

Kelly Voigt (SVP, Corporate Communications)

 

Apollo
            +44 20 7016 5000

Erin Clark

 

J.P. Morgan Cazenove (Sole Financial Adviser to Concord Bidco)
                        +44 203 493 8000

Jonty Edwards

Rupert Budge

Edward Hatter

Greg Slack

 

H/Advisors Maitland (PR Adviser to Concord and Concord Bidco)

Neil Bennett
 
+44 7900 000777

Jonathan Cook
 
            +44 7730 777865

Hipgnosis
 
+44 207 496 3000

Robert Naylor,
Chairman
 

Via Singer Capital Markets

 

Singer Capital Markets (Sole Rule 3 Adviser, Financial Adviser and Corporate
Broker to Hipgnosis)

James
Moat
+44 207 496 3000

Alaina Wong

Sam Butcher

Jalini Kalaravy

 

Shot Tower Capital LLC (Valuer and Strategic Advisor to Hipgnosis)
              +1 410 376 7900

David
Dunn

Robert Law

Rick Roebuck

Will Ponsi

 

Headland Consultancy (PR Adviser to Hipgnosis)
 
+44 203 805 4822

Susanna
Voyle

Charlie Twigg

 

Important notices

J.P. Morgan Securities LLC, together with its affiliate J.P. Morgan Securities
plc, which conducts its UK investment banking business as J.P. Morgan Cazenove
and which is authorised in the United Kingdom by the Prudential Regulation
Authority (the "PRA") and regulated in the United Kingdom by the PRA and the
FCA (together, "J.P. Morgan Cazenove") is acting as financial adviser
exclusively to Concord Bidco and no one else in connection with the
Acquisition and will not regard any other person as their client in relation
to the Acquisition and will not be responsible to anyone other than Concord
Bidco for providing the protections afforded to clients of J.P. Morgan
Cazenove or its affiliates, nor for providing advice in relation to the
Acquisition or any other matter or arrangement referred to herein.

Singer Capital Markets Advisory LLP ("Singer Capital Markets"), which is
authorised and regulated in the United Kingdom by the FCA, is acting as sole
Rule 3 adviser, financial adviser and corporate broker exclusively for
Hipgnosis and no-one else in connection with the matters described in this
Announcement and will not be responsible to anyone other than Hipgnosis for
providing the protections afforded to clients of Singer Capital Markets nor
for providing advice in connection with the matters referred to herein.

This Announcement is for information purposes only and is not intended to and
does not constitute, or form part of, an offer to sell or an invitation to
purchase any securities or a solicitation of an offer to buy, otherwise
acquire, subscribe for, sell or otherwise dispose of any securities pursuant
to the Acquisition or otherwise, nor shall there be any purchase, sale,
issuance or exchange of securities or such solicitation in any jurisdiction in
which such offer, invitation, solicitation, purchase, sale, issuance or
exchange is unlawful. The Acquisition will be made solely by means of the
Scheme Document (or, if the Acquisition is implemented by way of a Takeover
Offer, any document by which the Takeover Offer is made) and the accompanying
Forms of Proxy (or forms of acceptance, if applicable), which will contain the
full terms and conditions of the Acquisition, including details of how to vote
in respect of the resolutions proposed in connection with the Acquisition. Any
vote, approval, decision in respect of, or other response to, the Acquisition
should be made only on the basis of the information contained in the Scheme
Document (or any other document by which the Acquisition is made by way of a
Takeover Offer).

The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them, and the
release of this Announcement shall not give rise to any implication that there
has been no change in the facts set out in this Announcement since such date.

This Announcement does not constitute a prospectus or prospectus equivalent
document.

Hipgnosis Shareholders should not make any investment decision in relation to
the Acquisition except on the basis of the Scheme Document (or any other
document by which the Acquisition is made by way of a Takeover Offer).
Hipgnosis and Concord Bidco urge Hipgnosis Shareholders to read the whole of
the Scheme Document when it becomes available because it will contain
important information relating to the Acquisition.

No person should construe the contents of this Announcement as legal,
financial or tax advice. If you are in any doubt about the contents of this
Announcement or the action you should take, you are recommended to seek your
own independent financial advice immediately from your stockbroker, bank
manager, solicitor, accountant or from an independent financial adviser duly
authorised under FSMA if you are resident in the United Kingdom, or another
appropriately authorised independent financial adviser, if you are in a
territory outside the United Kingdom.

Overseas Shareholders

This Announcement has been prepared for the purpose of complying with Guernsey
law, English law, the Takeover Code, the Market Abuse Regulation, the
Disclosure Guidance and Transparency Rules and the Listing Rules and
information disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with the laws
of jurisdictions outside the United Kingdom or Guernsey. Nothing in this
Announcement should be relied on for any other purpose.

The release, publication or distribution of this Announcement in or into,
jurisdictions other than the United Kingdom or Guernsey may be restricted by
the laws and/or regulations of those jurisdictions and therefore persons into
whose possession this Announcement comes who are subject to the laws and/or
regulations of any jurisdiction other than the United Kingdom or Guernsey
should inform themselves about and observe any such applicable laws and/or
regulations in their jurisdiction. In particular, the ability of persons who
are not resident in the United Kingdom or Guernsey to vote their Scheme Shares
or Hipgnosis Shares (as applicable) with respect to the Scheme at the Court
Meeting or the General Meeting, or to appoint another person as proxy to vote
at the Court Meeting or the General Meeting on their behalf, may be affected
by the laws of the relevant jurisdiction in which they are located. Further
details in relation to Overseas Shareholders will be contained in the Scheme
Document. Any failure to comply with any such restrictions may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person.

Unless otherwise determined by Hipgnosis or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no person may
vote in favour of the Scheme by any such use, means, instrumentality or form
from within a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that jurisdiction. Accordingly,
copies of this Announcement and all documents relating to the Acquisition are
not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction, and persons
receiving this Announcement and all documents relating to the Acquisition
(including custodians, nominees and trustees) must not mail or otherwise
distribute or send them in, into or from such jurisdictions where to do so
would violate the laws in that jurisdiction. If the Acquisition is implemented
by a Takeover Offer (unless otherwise permitted by applicable law or
regulation), the Takeover Offer may not be made, directly or indirectly, in or
into or by use of the mails or any other means or instrumentality (including,
without limitation, facsimile, email or other electronic transmission, telex
or telephone) of interstate or foreign commerce of, or any facility of a
national state or other securities exchange, of any Restricted Jurisdiction
and the Takeover Offer will not be capable of acceptance by any such use,
means, instrumentality or facilities or from or within any Restricted
Jurisdiction.

Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.

Additional information for US investors

Hipgnosis Shareholders in the United States should note that the Acquisition
relates to the securities of a Guernsey company with a listing on the London
Stock Exchange and is proposed to be effected by means of a scheme of
arrangement provided for under, and governed by, the Companies Law. This
Announcement, the Scheme Document and certain other documents relating to the
Acquisition have been or will be prepared in accordance with Guernsey law,
English law, the Takeover Code and UK disclosure requirements, format and
style, all of which differ from those in the United States. A transaction
effected by means of a scheme of arrangement is not subject to the tender
offer rules or the proxy solicitation rules under the US Exchange Act.
Accordingly, the Acquisition is subject to the procedural and disclosure
requirements and practices applicable to a scheme of arrangement involving a
target company organised in Guernsey and listed on the London Stock Exchange,
which differ from the procedural and disclosure requirements of the United
States tender offer rules and proxy solicitation rules under the US Exchange
Act. If, in the future, Concord Bidco exercises the right to implement the
Acquisition by way of a Takeover Offer and determines to extend the offer into
the United States, the Acquisition will be made in compliance with applicable
United States laws and regulations. Such Takeover Offer would be made by
Concord Bidco and no one else.

The financial information that is included in this Announcement or that may be
included in the Scheme Document, or any other documents relating to the
Acquisition, has been or will be prepared in accordance with IFRS and may not
be comparable to financial statements of companies in the United States or
other companies whose financial statements are prepared in accordance with US
generally accepted accounting principles.

The Hipgnosis Shares have not been approved or disapproved by the Securities
Exchange Commission or any US state securities commission, nor have any such
authorities passed judgment upon the fairness or the merits of the Acquisition
or determined if this Announcement is accurate or complete. Any representation
to the contrary is a criminal offence in the United States.

US holders of Hipgnosis Shares should also be aware that the transaction
contemplated herein may have tax consequences in the United States and that
such consequences, if any, are not described herein. US holders of Hipgnosis
Shares are urged to consult with independent professional advisors regarding
the legal, tax and financial consequences of the Acquisition applicable to
them.

It may be difficult for US holders of Hipgnosis Shares to enforce their rights
and claims arising out of US federal securities laws, since Hipgnosis is
incorporated outside the United States, and its officers and directors may be
residents of, and some or all of their assets may be located in, countries
other than the United States. US holders of Hipgnosis Shares may have
difficulty effecting service of process within the United States upon those
persons or recovering against judgments of US courts, including judgments
based upon the civil liability provisions of the US federal securities laws.
US holders may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of US securities laws. Further, it
may be difficult to compel a non-US company and its affiliates to subject
themselves to a US court's judgement.

In accordance with normal practice in the UK and Guernsey and consistent with
Rule 14e-5(b) of the US Exchange Act, Concord Bidco, certain affiliated
companies and their nominees or brokers (acting as agents) may make certain
purchases of, or arrangements to purchase, shares in Hipgnosis outside the
United States, other than pursuant to the Acquisition, until the date on which
the Acquisition and/or Scheme becomes Effective, lapses or is otherwise
withdrawn. If such purchases or arrangements to purchase were to be made they
would occur either in the open market at prevailing prices or in private
transactions at negotiated prices and comply with applicable law, including
the US Exchange Act. Any information about such purchases or arrangements to
purchase will be disclosed as required in the United Kingdom, will be reported
to a Regulatory Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com.

Further details in relation to US investors will be contained in the Scheme
Document.

Forward-looking statements

This Announcement (including information incorporated by reference in this
Announcement), oral statements made regarding the Acquisition, and other
information published by Concord, Apollo, Concord Bidco or Hipgnosis contain
statements about Concord Bidco and Hipgnosis and/or the Wider Bidco Group that
are or may be deemed to be forward-looking statements. All statements other
than statements of historical facts included in this Announcement, may be
forward-looking statements. Without limitation, any statements preceded or
followed by or that include the words "targets", "plans", "believes",
"expects", "aims", "intends", "will", "may", "anticipates", "estimates",
"hopes", "projects", "continue", "schedule" or words or terms of similar
substance or the negative thereof, are forward-looking statements.
Forward-looking statements include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion
and growth of Concord's, Apollo's or Hipgnosis' or the Wider Bidco Group's
operations and potential synergies resulting from the Acquisition; and (iii)
the effects of government regulation on Concord's, Apollo's or Hipgnosis' or
the Wider Bidco Group's business.

These forward-looking statements are not based on historical fact and are not
guarantees of future performance. By their nature, such forward-looking
statements involve known and unknown risks and uncertainties that could
significantly affect expected results and are based on certain key
assumptions. Many factors could cause actual results to differ materially from
those projected or implied in any forward-looking statements. Many of these
risks and uncertainties relate to factors that are beyond the entities'
ability to control or estimate precisely. These factors include, but are not
limited to, the satisfaction of or failure to satisfy all or any of the
conditions to the Acquisition, as well as additional factors, such as changes
in political and economic conditions, changes in the level of capital
investment, retention of key employees, changes in customer habits, success of
business and operating initiatives and restructuring objectives, the impact of
any acquisitions or similar transactions, changes in customers' strategies and
stability, competitive product and pricing measures, changes in the regulatory
environment, fluctuations of interest and exchange rates and the outcome of
any litigation.

Neither Concord Bidco or Hipgnosis, nor any of their respective associates or
directors, officers, employees or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed or implied
in any forward-looking statements in this Announcement will actually occur.
Due to such uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of the date
of this Announcement. All subsequent oral or written forward-looking
statements attributable to Concord Bidco or Hipgnosis or any of their
respective members, directors, officers, employees or advisers or any persons
acting on their behalf are expressly qualified in their entirety by the
cautionary statement above. Concord Bidco and Hipgnosis expressly disclaim any
obligation to update any forward-looking or other statements contained in this
Announcement, except as required by applicable law or by the rules of any
competent regulatory authority, whether as a result of new information, future
events or otherwise.

Disclosure requirements of the City Code on Takeovers and Mergers

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 p.m. (London time) on the 10th
Business Day (as defined in the Takeover Code) following the commencement of
the Offer Period and, if appropriate, by no later than 3.30 p.m. (London time)
on the 10th Business Day (as defined in the Takeover Code) following the
announcement in which any securities exchange offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree company or
of a securities exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant securities of
each of (i) the offeree company and (ii) any securities exchange offeror(s),
save to the extent that these details have previously been disclosed under
Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be
made by no later than 3.30 p.m. (London time) on the Business Day (as defined
in the Takeover Code) following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4 of the Takeover Code).

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.

Right to switch to a Takeover Offer

Concord Bidco reserves the right to elect, with the consent of the Panel, to
implement the Acquisition by way of a Takeover Offer for the entire issued and
to be issued ordinary share capital of Hipgnosis as an alternative to the
Scheme. In such an event, the Takeover Offer will be implemented on the same
terms or, if Concord Bidco so decides, on such other terms being no less
favourable (subject to appropriate amendments), so far as applicable, as those
which would apply to the Scheme and subject to the amendment referred to in
Part B of Appendix 1 to the Rule 2.7 Announcement.

Publication of this Announcement on websites and availability of hard copies

A copy of this Announcement and the documents required to be published
pursuant to Rules 26.1 and 26.2 of the Takeover Code will be available, free
of charge, subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on
https://communications.singercm.com/p/4UWI-ETV/recommended-cash-offer-hipgnosis
and Concord Bidco's website at www.projectchorus.com by no later than 12.00
p.m. on the Business Day following the date of this Announcement.

In accordance with Rule 30.3 of the Takeover Code, Hipgnosis Shareholders and
persons with information rights may request a hard copy of this Announcement
by contacting Hipgnosis' registrars, Computershare Investor Services
(Guernsey) Limited, or by calling 0370 707 4040 or from overseas +44 370 707
4040. Calls are charged at the standard geographical rate and will vary by
provider. Calls outside the United Kingdom or Guernsey will be charged at the
applicable international rate. Lines are open between 8.30 a.m. to 5.30 p.m.
(London time), Monday to Friday (except public holidays in the UK and
Guernsey). Please note that Computershare Investor Services (Guernsey) Limited
cannot provide any financial, legal or tax advice. Calls may be recorded and
monitored for security and training purposes. For persons who receive a copy
of this Announcement in electronic form or via a website notification, a hard
copy of this Announcement will not be sent unless so requested. Such persons
may also request that all future documents, announcements and information to
be sent to them in relation to the Acquisition should be in hard copy form.

Information relating to Hipgnosis Shareholders

Please be aware that addresses, electronic addresses and certain information
provided by Hipgnosis Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Hipgnosis may be
provided to Concord Bidco during the Offer Period as required under Section 4
of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.

Rounding

Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an exact arithmetic aggregation of the figures that precede
them.

 

APPENDIX 1

BASES AND SOURCES

1             All Closing Prices for Hipgnosis Shares have been
derived from Bloomberg as of 17 April 2024, being the last Business Day prior
to the commencement of the Offer Period, unless stated otherwise.

2             Volume weighted average prices have been derived
from Bloomberg as of 17 April 2024, being the last Business Day prior to the
commencement of the Offer Period, and have been rounded.

3             As at the Latest Practicable Date, there were
1,209,214,286 Hipgnosis Shares in issue, all of which are credited as fully
paid and 2,000,000 Hipgnosis shares were held as treasury shares.

4             As at the close of business on 23 April 2024, being
the latest practicable date prior to the date of this Announcement, the number
of Hipgnosis Shares eligible to vote on: (i) the Scheme at the Court Meeting
is 1,208,822,321 Hipgnosis Shares (which excludes shares held as treasury
shares and those Hipgnosis Shares in which Concord Bidco is interested); and
(ii) the Resolution at the General Meeting is 1,208,822,321 Hipgnosis Shares
(which excludes shares held as treasury shares and those Hipgnosis Shares in
which Concord Bidco is interested.

5             The Increased Offer Announcement Exchange Rate is
defined as the GBP:USD exchange rate of 1:1.2431 as at 17:00 GMT on 23 April
2024 as derived from data provided by Bloomberg.

 

APPENDIX 2

irrevocable undertakings AND LETTERS OF INTENT

Summary of Irrevocable Undertakings

 

 Name of beneficial holder     Number of Hipgnosis Shares in respect of which undertaking is given  Percentage of Hipgnosis Shares in issue at the latest practicable date (%)
 Hipgnosis Directors           327,796                                                              0.027
 Other Hipgnosis Shareholders  307,835,094                                                          25.457
 Total Hipgnosis Shares        308,162,890                                                          25.485

Irrevocable Undertakings from the Hipgnosis Directors

 

The following Hipgnosis Directors have given irrevocable undertakings in
respect of their entire beneficial holdings of Hipgnosis Shares to vote or
procure votes in favour of the Resolution to be proposed at the General
Meeting, amounting in aggregate to 327,796 Hipgnosis Shares, representing
approximately 0.027 per cent. of Hipgnosis' existing issued ordinary share
capital as at the close of business on 24 April 2024:

 

 Name              Number of Hipgnosis Shares in respect of which undertaking is given  Percentage of Hipgnosis Shares in issue at the latest practicable date (%)
 Robert Naylor     100,000                                                              0.008
 Simon Holden      150,796                                                              0.012
 Francis Keeling   50,000                                                               0.004
 Cindy Rampersaud  27,000                                                                0.002

 

These irrevocable undertakings will cease to bind if:

 

(i)       the Scheme Document or, if the Acquisition is implemented by
way of a Takeover Offer, the offer document (as applicable) has not been
posted to Hipgnosis Shareholders within 28 days of the issue of this Rule 2.7
Announcement (or within such longer period as Concord Bidco and Hipgnosis,
with the consent of the panel, may agree);

 

(ii)      the Scheme or Takeover Offer (as applicable) or the Resolution
to be proposed is not approved by the requisite majority of the Hipgnosis
Shareholders at the General Meeting or the Court Meeting;

 

(iii)     the Scheme or Takeover Offer (as applicable) has not become
Effective, or become or been declared unconditional in all respects (as the
case may be), on or before the Long Stop Date;

 

(iv)     the Scheme does not become Effective or, as applicable, the Offer
lapses or is withdrawn and no new, revised or replacement Scheme or Takeover
Offer is or has been announced in accordance with the Takeover Code at the
same time;

 

(v)      before despatch of the Scheme Document or, if the Acquisition is
implemented by way of a Takeover Offer, the offer document (as the case may
be) any event occurs or becomes known to Concord Bidco or its financial
adviser as a result of which the Panel requires or agrees that Concord Bidco
need not make the offer; or

 

(vi)     any competing offer for the entire issued and to be issued share
capital of Hipgnosis is declared unconditional or, if implemented by way of a
scheme of arrangement, becomes effective

 

 

Irrevocable Undertakings from other Hipgnosis Shareholders

 

In addition to the irrevocable undertakings given by the Hipgnosis Directors
as set out above, Concord Bidco has received irrevocable undertakings to vote
in favour of the Scheme at the Court Meeting, and in favour of the Resolution
at the General Meeting (or, in the event that the Acquisition is implemented
by way of a Takeover Offer, to accept or procure acceptance of the Takeover
Offer), in respect of, in aggregate, 308,162,890 Hipgnosis Shares representing
approximately 25.48 per cent. of Hipgnosis' issued share capital as at the
close of business on 24 April 2024.

 

 

 Name of Hipgnosis Shareholder                                              Number of Hipgnosis Shares in respect of which undertaking is given  Percentage of Hipgnosis Shares in issue at the latest practicable date (%)
 Asset Value Investors Limited                                              90,141,594                                                           7.455
 CCLA Investment Management                                                 57,725,227                                                           4.774
 Schroder & Co Limited                                                      54,247,904                                                           4.486
 J O Hambro Capital Management Limited                                      13,477,349                                                           1.115
 Madison Avenue Partners, LP                                                18,621,841                                                           1.540
 KL Special Opportunities Master Fund Limited and KL UCITS ICAV - KL Event  17,000,000                                                           1.405
 Driven UCITS Fund
 Gresham House Asset Management Ltd                                         16,585,952                                                           1.372
 Hawksmoor Investment Management                                            15,585,000                                                           1.289
 Josh Gruss                                                                 12,893,227                                                           1.066
 Premier Fund Managers Limited                                              11,557,000                                                           0.956

 

These irrevocable undertakings will cease to bind:

 

(i)       if the Scheme Document or, if the Acquisition is implemented
by way of a Takeover Offer, the offer document (as applicable) has not been
posted to Hipgnosis Shareholders within 28 days of the issue of the Rule 2.7
Announcement (or within such longer period as Concord Bidco and Hipgnosis,
with the consent of the Panel, may agree);

 

(ii)      in the case of Madison Avenue Partners, LP, if the Court
Meeting and the General Meeting are not held by 30 June 2024;

 

(iii)     In the case of KL Special Opportunities Master Fund Limited and
KL UCITS ICAV - KL Event Driven UCITS Fund, if the price under the Scheme (or
Takeover Offer, if the Offer proceeds by way of a Takeover Offer) is less than
$1.25 per Ordinary Share or is wholly or partly non-cash;

 

(iv)     if the Scheme or Takeover Offer (as applicable) or the Resolution
is not approved by the requisite majority of: (a) the Scheme Shareholders at
the Court Meeting or (b) the Hipgnosis Shareholders at the General Meeting (as
the case may be);

 

(v)      if the Scheme or Takeover Offer (as applicable) has not become
Effective, or become or been declared unconditional in all respects (as the
case may be), on or before the Long Stop Date;

 

(vi)     if the Scheme does not become Effective or, as applicable, the
offer lapses or is withdrawn and no new, revised or replacement Scheme or
Takeover Offer is or has been announced in accordance with the Takeover Code
at the same time;

 

(vii)    if before despatch of the Scheme Document or, if the Acquisition
is implemented by way of a Takeover Offer, the offer document (as the case may
be) any event occurs or becomes known to Concord Bidco or its financial
adviser as a result of which the Panel requires or agrees that Concord Bidco
need not make the offer;

 

(viii)    if any competing offer for the entire issued and to be issued
share capital of Hipgnosis is declared unconditional or, if implemented by way
of a scheme of arrangement, becomes effective;

 

(ix)     if a competing offer for the entire issued and to be issued ordinary share capital of Hipgnosis, howsoever structured, is announced provided that such offer represents a value per Hipgnosis Share of not less than 10 per cent above the maximum value of the consideration per Hipgnosis Share then available under the terms of the offer made by Concord Bidco (or in the case of Madison Avenue Partners, LP, KL Special Opportunities Master Fund Limited and KL UCITS ICAV - KL Event Driven UCITS Fund, a value per Hipgnosis Share of not less than 5 per cent above maximum value of the consideration per Hipgnosis Share then available under the terms of the offer made by Concord Bidco); or
(x)      in the case of Premier Fund Managers Limited, in respect of any Hipgnosis Shares that are required to be sold to meet redemption requests or to ensure compliance with the investment and borrowing limits set out under the FCA's Collective Investment Scheme Sourcebook, provided they have used all reasonable endeavours to explore other options to meet these regulatory obligations.

Letter of Intent

 

Concord Bidco has also received a non-binding letter of intent to vote in
favour of the Scheme at the Court Meeting, and in favour of the Resolution at
the General Meeting (or, in the event that the Acquisition is implemented by
way of a Takeover Offer, to accept or procure acceptance of the Takeover
Offer), in respect of, in aggregate, 70,000,000 Hipgnosis Shares representing
approximately 5.789 per cent. of Hipgnosis' issued share capital as at the
close of business on 24 April 2024.

 

 Name of Hipgnosis Shareholder             Number of Hipgnosis Shares in respect of which undertaking is given  Percentage of Hipgnosis Shares in issue at the latest practicable date (%)
 Investec Wealth & Investment Limited      70,000,000                                                           5.789

 

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