REG - Hipgnosis Songs Fund - Publication of Circular and Notice of AGM & EGM

Hipgnosis Songs FundAnnouncement

28/09/2023 11:15

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RNS Number : 0209O  Hipgnosis Songs Fund Limited  28 September 2023

LEI: 213800XJIPNDVKXMOC11

Hipgnosis Songs Fund Limited

28 September 2023

For immediate release

 

Hipgnosis Songs Fund Limited

Publication of Circular and Notice of General Meetings

 

On 14 September 2023, Hipgnosis Songs Fund Limited ("Hipgnosis" or the
"Company") announced that it had entered into a transaction to sell a
portfolio of 29 music catalogues to Hipgnosis Songs Capital, the trading name
of Hipgnosis SC IV (Delaware) L.P. (the "Buyer") for aggregate cash
consideration of $440 million (the "Transaction").

Further to such announcement, the Company announces that the circular relating
to the Transaction (the "Circular") has been approved by the UK Financial
Conduct Authority and has been published today. The Circular will shortly be
posted to the Company's shareholders that have elected to receive hard copies
of shareholder documentation.

Following the announcement on 14 September 2023, the Board has continued to
engage with shareholders on the strategic rationale and merits of the
Transaction. The Board and the Investment Adviser firmly believe that the
Company has a unique portfolio of iconic, culturally significant songs that
will deliver strong long-term value as they benefit from the structural
tailwinds in the music industry. Furthermore, the Board believes that the
Investment Adviser's approach to Song Management should enable the Company to
outperform the wider music market. This has been evidenced by the 44% total
return, including right to income, transaction fees and expected taxes,
realised since acquisition on the Transaction. Furthermore, the Board and the
Investment Adviser are committed to ensuring that this value is achieved for
shareholders by a re-rating of the share price and are determined to deliver
on the ongoing opportunity of the Company.

Against this backdrop, the Board and Investment Adviser have included in the
Circular the following actions which will provide shareholders with greater
opportunities to realise value in a shorter timeframe should the share price
re-rating not occur:

·      The Board has resolved that, if the Continuation Resolution is
approved at the 2023 Annual General Meeting, the Directors will put a further
Continuation Resolution to Shareholders at an extraordinary general meeting in
January 2026, again at the Annual General Meeting to be held in 2028 and at
every third Annual General Meeting thereafter;

·      The Board and the Investment Adviser have agreed certain further
amendments to the Investment Advisory Agreement between the Company and the
Investment Adviser such that (subject to the Continuation Resolution being
passed) the Investment Advisory Agreement will be terminable by the Company on
12 months' notice; and

·      If the Company's share price stands at an average discount to
Operative NAV (as determined at the time of publication of the interim report
for the period to 30 September 2024) of 10% or more, measured on average over
the month of January 2025, the Board intends to serve notice to terminate the
Investment Advisory Agreement.  The Board may withdraw the notice before the
effective date of termination if it considers it to be in the interests of
shareholders to do so.

Andrew Sutch has informed the Board that he will step down as Chair and retire
as a director of the Company once a suitable replacement is found and, in any
event, at or before the Company's annual general meeting in 2024. The Company
will now commence a process to recruit a new Chair. In addition, Andrew
Wilkinson has also informed the Board that he intends to retire as a director
before the end of 2023, thereby reducing the Board to five directors. The
Board intends to appoint Cindy Rampersaud, who joined the Board as an
Independent Non-Executive Director on 1 August 2023, to the role of chair of
the Company's Audit and Risk Management Committee upon Andrew Wilkinson's
retirement.

The Transaction constitutes a related party transaction for Hipgnosis under
the Listing Rules and completion of the Transaction is conditional upon, among
other things, the approval of the Company's shareholders at a general meeting
of the Company. Accordingly, the Circular contains a notice convening an
extraordinary general meeting of the Company which is to be held at 10:30am on
26 October 2023 at United House, 9 Pembridge Road, Notting Hill, London, W11
3JY, United Kingdom (the "Extraordinary General Meeting") at which an ordinary
resolution will be proposed for the Company's shareholders to approve the
Transaction.

In addition, the terms of the Transaction include a "Go-Shop" provision,
pursuant to which the Board is entitled to solicit alternative offers for a
period of 40 days from 14 September 2023, and the Board has recently confirmed
that credible third parties are already engaged in this Go-Shop process.

The Circular also incorporates a notice convening the annual general meeting
of the Company which is to be held at 10:00am on 26 October 2023 at United
House, 9 Pembridge Road, Notting Hill, London, W11 3JY, United Kingdom (the
"2023 Annual General Meeting" and, together with the Extraordinary General
Meeting, the "Meetings") at which resolutions will be proposed for the
Company's shareholders to approve, amongst other things, an on-market share
buy back programme and the continuation by the Company of its business as a
closed-ended investment company.

If shareholders are unable to attend and vote in person, the directors of the
Company strongly recommend that shareholders vote by proxy as soon as
possible. Further information as to how to vote by proxy can be found in the
notices of the Meetings contained in the Circular. The expected timetable of
principal events, as contained in the Circular, is as follows:

                                                                                Time and Date
 Start of Go-Shop Period                                                        14 September 2023
 Publication of the Circular                                                    28 September 2023
 End of Go-Shop Period(1)                                                       11:59 p.m. on 23 October 2023
 Latest time for receipt of individual blue Forms of Proxy for the 2023 Annual  10:00 a.m. on 24 October 2023
 General Meeting
 Latest time for receipt of individual white Forms of Proxy for the             10:30 a.m. on 24 October 2023
 Extraordinary General Meeting
 Voting Record Time for the 2023 Annual General Meeting and the Extraordinary   6:30 p.m. on 24 October 2023(2)
 General Meeting
 2023 Annual General Meeting                                                    10:00 a.m. on 26 October 2023
 Extraordinary General Meeting                                                  10:30 a.m. on 26 October 2023(3)
 (1) The Board will publish an announcement through the Regulatory Information
 Service of the London Stock Exchange as soon as practicable following the end
 of the Go-Shop Period and/or Matching Right Period, to update shareholders of
 the outcome of the Go-Shop Process.

 (2) If either of the Meetings is adjourned, the Voting Record Time for the
 relevant reconvened Meeting will be 6:30 p.m. on the day which is two calendar
 days before the date set for the relevant reconvened Meeting.

 (3) The Extraordinary General Meeting will commence at the time stated above
 or as soon thereafter as the 2023 Annual General Meeting has been concluded or
 adjourned.

 The timetable may be subject to change. If any of the above times and/or dates
 change, the revised times and/or dates will be notified to shareholders by an
 announcement through the Regulatory Information Service of the London Stock
 Exchange.

If the Go-Shop Process concludes with no Superior Proposal having been
received, the Board expects the Annual General Meeting and Extraordinary
General Meeting will proceed on the date stated in this announcement. In the
event a Superior Proposal is received during the Go-Shop Period and the Buyer
exercises its matching right, the Board expects it may be necessary to adjourn
the Shareholder Meetings to a later date in November 2023. In the event the
Board receives a Superior Proposal, the Matching Right Period has expired
without the Buyer having matched (or improved upon) such Superior Proposal and
the Asset Sale Agreement is terminated in favour of such Superior Proposal,
the Board expects that the Extraordinary General Meeting will be adjourned and
not rescheduled, and the Annual General Meeting will be rescheduled in
November 2023

A copy of the Circular will be submitted to the National Storage Mechanism and
the Circular will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism. In addition, a copy of
the Circular will be available for inspection on the Company's website at
https://www.hipgnosissongs.com/song-investors/company-documents
(https://www.hipgnosissongs.com/song-investors/company-documents) from the
date of the Circular up to and including the conclusion of the Extraordinary
General Meeting.

 For further information please contact:

 For Hipgnosis Song Management                                             +44 (0)20 4542 1511

 Merck Mercuriadis

 Ben Katovsky

 Giles Croot
 Teneo - Financial PR to HSM                                               +44 (0) 20 7353 4200

 James Macey White / Ed Cropley
 For Hipgnosis Songs Fund                                                  +44 (0) 20 4542 1530

 Andrew Sutch

 Rufina Pavry (Investor Relations for Hipgnosis Songs)
 Headland Consultancy - Financial PR to Hipgnosis Songs Fund               +44 (0) 20 3805 4822

 Susanna Voyle / Del Jones / Charlie Twigg
 The Outside Organisation                                                  +44 (0)7711 081843

 Alan Edwards/ Nick Caley
 Fran DeFeo PR                                                             +1 917 767 5255

 Fran DeFeo
 J.P. Morgan Cazenove - Sponsor, Financial Adviser and Corporate Broker    +44 (0)203 493 8000

 William Simmonds / Jérémie Birnbaum (Corporate Finance)
 Singer Capital Markets - Corporate Broker                                 +44 (0)20 7496 3000

 James Moat / James Maxwell / Angus Campbell (Corporate Finance)

 Alan Geeves / James Waterlow / Sam Greatrex (Sales)
 RBC Capital Markets - Corporate Broker                                    +44 (0)20 7635 4000

 Elliot Thomas / Max Avison (Corporate Finance)

 Lisa Tugwell /  Natalia Lipecka (Sales)

 

IMPORTANT NOTICE

This announcement is not intended to, and does not constitute, or form part
of, any offer to sell or issue or any solicitation of an offer to purchase,
subscribe for, or otherwise acquire, any securities or a solicitation of any
vote or approval in any jurisdiction. Hipgnosis shareholders are advised to
read carefully the Circular once it has been published. Any response to the
Transaction should be made only on the basis of the information in the
Circular to follow.

J.P. Morgan Securities PLC, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United
Kingdom by the Prudential Regulation Authority (the "PRA") and regulated by
the Financial Conduct Authority ("FCA") and PRA. J.P. Morgan Cazenove is
acting as sponsor and financial adviser exclusively for the Company and no one
else in connection with the Transaction and the matters set out in this
announcement and will not regard any other person as its client in relation to
the Transaction and will not be responsible to anyone other than the Company
for providing the protections afforded to clients of J.P. Morgan Cazenove or
its affiliates, or for providing advice in relation to the Transaction or any
other matters referred to in this announcement. Apart from the
responsibilities and liabilities, if any, which may be imposed on J.P. Morgan
Cazenove by FSMA or the regulatory regime established thereunder or under the
regulatory regime of any jurisdiction where the exclusion of liability under
the relevant regulatory regime would be illegal, void or unenforceable, J.P.
Morgan Cazenove and any person affiliated with it assumes no responsibility
whatsoever for and makes no representation or warranty express or implied, in
relation to the contents of this announcement, including its accuracy,
completeness or verification or for any other statement made or purported to
be made by it, or on its behalf and nothing contained in this announcement is,
or shall be, relied upon as a promise or representation in this respect
whether as to the past, present or future, in connection with the Company, or
the Transaction. J.P. Morgan Cazenove and its respective subsidiaries,
branches and affiliates accordingly disclaims to the fullest extent permitted
by law all and any duty, responsibility and liability whether arising in tort,
contract or otherwise (save as referred to above) which it might otherwise be
found to have in respect of this announcement or any such statement or
otherwise. Any reproduction or distribution of this announcement, in whole or
in part, and any disclosure of its contents or use of any information
contained in this announcement for any purpose other than considering the
terms of the Transaction is prohibited.

This announcement contains "forward-looking statements" which includes all
statements other than statements of historical fact, including, without
limitation, those regarding the Company's financial position, business
strategy, plans and objectives of management for future operations, or any
statements preceded by, followed by or that include the words "targets",
"believes", "expects", "aims", "intends", "will", "may", "anticipates",
"would, "could" or similar expressions or negatives thereof. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors beyond the Company's control that could cause the
actual results, performance or achievements of the Company to be materially
different from future results, performance or achievements expressed or
implied by such forward-looking statements. Such forward-looking statements
are based on numerous assumptions regarding the Company's present and future
business strategies and the environment in which the Company will operate in
the future. These forward-looking statements speak only as at the date of this
announcement. None of the Company, J.P. Morgan or their respective Affiliates
undertakes or is under any duty to update this announcement or to correct any
inaccuracies in any such information which may become apparent or to provide
you with any additional information, other than any requirements that the
Company may have under applicable law or the Listing Rules, the Prospectus
Rules, the Disclosure Guidance and Transparency Rules or MAR. To the fullest
extent permissible by law, such persons disclaim all and any responsibility or
liability, whether arising in tort, contract or otherwise, which they might
otherwise have in respect of this announcement. The information in this
announcement is subject to change without notice.

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