LONDON – Music rights giant Hipgnosis Songs Fund Ltd. announced on Monday that it will support a revised $1.6 billion bid from Blackstone Inc., as the private equity heavyweight restructures its offer to facilitate a full takeover of the company.

Blackstone's new offer of $1.31 per share, up one cent from the initial $1.30 per share bid made in April, raises the music royalties business's valuation from $1.572 billion to $1.584 billion. This revised bid, made by Blackstone Europe LLP, signifies the latest development in a competitive bidding war for Hipgnosis, which holds publishing rights to songs by artists including Shakira and Lady Gaga.

Hipgnosis $1.6 Billion Blackstone Bid

In a strategic move to ease the acquisition process, Blackstone announced it would shift its April takeover offer to a scheme of arrangement. This legal maneuver allows the bidder to acquire 100% of the target company's shares if at least 75% of shareholders vote in favor of the deal, contrasting with the 90% acceptance threshold required in a straight takeover offer to force a buyout of remaining shares.

Hipgnosis shareholders will vote on the scheme at upcoming court and general meetings, with details to be provided by June 14. The board of Hipgnosis expressed confidence in the revised terms, deeming them "fair and reasonable," and unanimously recommended that shareholders vote in favor of the scheme.

The U.K.'s Competition and Markets Authority has not raised any concerns with the proposed deal, clearing a potential regulatory hurdle. Hipgnosis, with a portfolio of approximately 150 music catalogs containing over 40,000 songs and a net asset value exceeding $3 billion, remains a lucrative target in the music rights sector.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, remarked on the deal's significance for investors, noting that while some may have hoped for a higher bid from rival suitors, the current offer represents a positive outcome.

Kirkland & Ellis LLP is advising Blackstone, while Shoosmiths LLP and Carey Olsen LLP serve as legal advisers to Hipgnosis in the U.K. and Guernsey, respectively.

The outcome of this high-stakes bidding war will set a precedent in the music rights industry, highlighting the strategic maneuvers employed by major players in the market.

The case is being closely monitored by stakeholders and industry analysts, with significant implications for the future of music rights acquisitions and private equity investments in the sector.