By Indranil Sarkar
-Hipgnosis Songs Fund, owner of the rights to artists including Neil Young and Shakira, is selling shares worth 150 million pounds ($211 million) to buy more songs, it said on Wednesday, as it increases its bet on a pandemic-driven boom in streaming.
The London-listed fund earns royalties every time a song it owns is streamed, and has benefited as people have tuned in to classics and newer hits while stuck at home during lockdowns.
The planned share sale follows a similar 75-million-pound share offering by Hipgnosis in February, as well as a string of high-profile music deals by the company, including with Taylor Swift’s songwriter and a producer for American heavy metal legends Metallica.
“This raise gives our public markets investors … the only chance for the next 12 months to get access to Hipgnosis’ existing portfolio as well as a pipeline comprising some of the most important and successful songs of all time,” founder Merck Mercuriadis said in a statement.
The company, which went public in 2018, enjoyed a 66% surge in annual revenue, results published this month show, as people streamed hits, such as “Don’t Stop Believin’” by U.S. rock band Journey.
Hipgnosis said the offering of 124 million shares would be priced at 121 pence each, a discount of 2.4% to the stock’s closing price on Tuesday.
While streaming is booming, rights are also costly.
The company bought over 33,000 songs from Kobalt Music Copyrights for $323 million in November, months after it had raised 190 million pounds in another share sale.
Its shares – which more than doubled in value last year – were down 1.4% at 0847 GMT on the London Stock Exchange, while the wider sector was down 0.3%.
The funds raised would be used to buy songs identified by Hipgnosis investment adviser The Family (Music) Ltd, the company said.
($1 = 0.7096 pounds)