- Investors have six months to decide next steps
- Sale of song catalogue also vetoed
- Search begins for new chair and director
Shareholders in Hipgnosis Songs Fund (SONG) have voted conclusively against the continuation of the music royalty investment trust at their annual general meeting (AGM) and extraordinary general meeting (EGM).
In addition, shareholders voted against the proposed $440 million sale of 29 music catalogues to Hipgnosis Songs Capital – a partnership between the investment manager and Blackstone - which was announced on 14 September.
Shareholders have six months to decide what to do next, whether that involves ‘reconstruction, reorganisation or winding-up of the company’ in accordance with Hipgnosis’ prospectus.
‘These proposals may or may not involve winding up the company or liquidating all or part of the company's existing portfolio of investments,’ the company added.
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Sylvia Coleman, senior independent director of Hipgnosis said: ‘The board and the investment adviser have each engaged widely with investors over recent months.
‘While shareholders have not supported our proposed transaction or the continuation vote, it is clear that they share our belief in the inherent quality and potential of these assets.
‘The directors are now expediting the appointment of a new chair who will drive the strategic review we have already announced, with a clear focus on delivering improved shareholder value.’
Is the end in sight for Hipgnosis Songs Fund after years of misery for investors?
On the eve of today's AGM and EGM, Andrew Wilkinson and Paul Burger resigned as non-executive directors of the group.
FALLEN STAR
The music royalty firm owns the song rights for artists including Justin Bieber, Jon Bon Jovi and Neil Young.
It was founded in 2018 by Merck Mercuriadis, the former manager of Elton John, Beyonce, Guns N Roses and Nile Rodgers, the US record producer, guitarist and co-founder of Chic.
Shares in Hipgnosis barely moved after the shareholders’ vote trading down 1% to 75p. Year-to-date shares are down over 14%.
Disclaimer: The author (Sabuhi Gard) owns shares in Hipgnosis Songs Fund.
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