TIDMSONG
RNS Number : 9197N
Hipgnosis Songs Fund Limited
27 September 2019
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, TO ANY US PERSONS OR IN OR INTO THE
UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN, OR ANY
OTHER JURISDICTION, OR TO ANY PERSON, WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF APPLICABLE LAW.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS. THIS
ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE
CONSTRUED AS, AN OFFER FOR SALE OR SUBSCRIPTION OF, OR SOLICITATION
OF ANY OFFER TO BUY OR SUBSCRIBE FOR, ANY ORDINARY SHARES IN THE
COMPANY, IN ANY JURISDICTION, INCLUDING THE UNITED STATES, NOR
SHALL IT, OR ANY PART OF IT, OR THE FACT OF ITS DISTRIBUTION, FORM
THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR
INVESTMENT DECISION WHATSOEVER, IN ANY JURISDICTION. THIS
ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMATION REGARDING ANY
SECURITIES. ANY INVESTMENT DECISION MUST BE MADE EXCLUSIVELY ON THE
BASIS OF THE PROSPECTUS TO BE PUBLISHED BY THE COMPANY IN
CONNECTION WITH THE ISSUE.
This announcement contains Inside Information as defined under
the Market Abuse Regulation (EU) No. 596/2014.
27 September 2019
HIPGNOSIS SONGS FUND LIMITED
(the "Company" or "Hipgnosis")
INITIAL PLACING, OFFER FOR SUBSCRIPTION AND INTERMEDIARIES OFFER
OF C SHARES AND PLACING PROGRAMMES
AND
PUBLICATION OF CIRCULAR AND NOTICE OF EXTRAORDINARY GENERAL
MEETING
Further to the announcement on 10 September 2019, Hipgnosis
announces an Initial Placing, Offer for Subscription and
Intermediaries Offer of C shares of the Company (the "C Shares") at
a price of 100 pence per C Share (the "Initial Issue Price") (the
"Initial Issue") and Placing Programmes of up to 1 billion new
Ordinary Shares and/or C Shares (the "Placing Programmes").
The Company expects to use the net proceeds of the Initial Issue
to acquire an attractive pipeline of Catalogues that The Family
(Music) Limited (the "Investment Adviser") has identified in line
with the Company's investment policy. Accordingly, the Company is
seeking to raise a target amount of GBP300 million (before
expenses) via the Initial Issue that will provide the Company with
funds to capitalise on these investment opportunities.
Any capitalised terms used but not otherwise defined in this
announcement have the meaning set out in the prospectus to be
published by the Company in connection with the Initial Issue and
Placing Programmes.
Initial Issue highlights
-- The target size of the Initial Issue is 300 million C Shares
at the Initial Issue Price of 100 pence per C Share. The maximum
number of C Shares issued pursuant to the Initial Issue shall not
exceed 500 million
-- The net proceeds will be used to acquire attractive
Catalogues containing proven hit Songs from well-known songwriters,
artists and producers which are in line with the Company's
Investment Policy to create further value for shareholders as well
as increase the diversity of the portfolio
-- The Company currently expects to deploy the net proceeds of
the Initial Issue within six months of Admission
-- An increase in the size of the Company will spread its fixed
operating expenses over a larger capital base, which should reduce
ongoing expenses per Share
-- An increase in the size of the Company should also improve
liquidity and enhance the marketability of the Company's Ordinary
Shares, post conversion of the C Shares, resulting in a broader
investor base over the longer term
-- The actual number of C Shares to be issued pursuant to the
Initial Issue will be determined by the Company and the Joint
Bookrunners after taking into account the demand for C Shares and
prevailing market conditions
-- Through the Initial Issue the risks of cash drag and NAV
dilution during the investment period will be mitigated by issuing
C Shares, rather than Ordinary Shares
-- The Initial Issue, which is not underwritten, is conditional,
amongst other things, upon the approval of a prospectus in
connection with the Initial Issue by the FCA (expected later
today), Admission of the C Shares occurring no later than 8.00 a.m.
on 22 October 2019 (or such later time and/or date as the Company
and the Joint Bookrunners may agree) and the Placing Agreement not
being terminated and becoming unconditional in accordance with its
terms. If these conditions are not met, the Initial Issue will not
proceed and an announcement to that effect will be made via a
Regulatory Information Service
-- The C Shares to be issued pursuant to the Initial Issue (or
any Subsequent Placing under the Placing Programmes) will carry the
right to vote in accordance with the Company's Articles, and will
be entitled to participate in any dividends in relation to the
assets attributable to the Initial Issue
-- Application will be made for the C Shares to be admitted to
the Premium listing segment of the Official List of the FCA and to
trading on the London Stock Exchange's main market for listed
securities
Pipeline
The Investment Adviser has entered into exclusivity agreements
to acquire 9 Catalogues with an aggregate purchase price in the
region of GBP300 million from well-known songwriters, artists and
producers (the "Pipeline Catalogues"). In addition, the Company is
in discussions on an expanded pipeline with an aggregate purchase
price, together with the Pipeline Catalogues, of approximately GBP1
billion.
The Board and the Investment Adviser believe suitable
acquisition opportunities exist which would allow the Net Issue
Proceeds to be deployed within six months following Initial
Admission.
Dividends
The Company has, since the IPO, paid and intends to continue to
pay interim quarterly dividends to Ordinary Shareholders in
November, February, May and August of each year. The Company's
target dividend yield is 5 per cent. per annum on the Ordinary
Shares (based on the issue price of the Ordinary Shares at IPO).(1)
In addition the Board will target a total NAV return on the
Ordinary Shares of 10 per cent. or more per annum (based on the
issue price of the Ordinary Shares at IPO over the medium term (net
of fees and expenses)). (1)
The Directors have determined that the holders of the C Shares
to be issued pursuant to the Initial Issue will be entitled to
participate in any dividends of the Company in relation to assets
attributable to that class of C Shares. Such amount will depend on
the revenues received from Catalogues attributable to that class of
C Shares, which is not known at the time of this Prospectus. C
Shareholders will be informed of any dividends declared by the
Company in respect of the C Shares to be issued pursuant to the
Initial Issue by way of an RIS announcement.
The Directors will seek to maintain and grow the dividend over
the long term and may offer Shareholders the opportunity to receive
dividends in the form of scrip dividends.
Conversion of the C Shares
The C Shares to be issued pursuant to the Initial Issue will
convert to New Ordinary Shares within one month of the Calculation
Time, being the earlier of: (i) the close of business on the date
on which the Board becomes aware or is notified by the Investment
Adviser that at least 80 per cent. of the Net Issue Proceeds has
been invested in accordance with the Company's Investment Objective
and Policy; or (ii) the close of business on 21 October 2020 (being
the date that is 12 months following Initial Admission).
On the relevant Calculation Time, the net assets attributable to
the Ordinary Shares then in issue, the net assets attributable to
the C Shares issued pursuant to the Initial Issue and the resultant
Conversion Ratio will be calculated.
Holders of a class of C Shares will receive such number of New
Ordinary Shares as results from applying the Conversion Ratio to
their holdings in the C Shares on the Conversion Time, with
fractions of New Ordinary Shares being dealt with by the Directors
in such manner as they see fit.
Following the Calculation Time, the Directors shall procure that
the Conversion Ratio and the number of New Ordinary Shares due to
each holder of the C Shares is calculated and that the Company's
independent valuer prepares the fair valuations of the assets
attributable to the Company's Ordinary Shares and the relevant
class of C Shares in accordance with the Company's latest published
valuation methodology.
Prospectus and Circular
Further details of the Initial Issue, Placing Programmes and
Admission will be set out in the Prospectus, which, together with a
Circular, are expected to be available today on the Company's
website at www.hipgnosissongs.com and at the Company's registered
office at PO Box 286, Floor 2, Trafalgar Court, Les Banques, St
Peter Port, Guernsey GY1 4LY during normal office hours.
Copies of the Prospectus and the Circular will be submitted to
the National Storage Mechanism and will shortly be available for
inspection at www.morningstar.co.uk/uk/NSM.
The Circular convening the Extraordinary General Meeting at
which the Directors are seeking authority to, inter alia, disapply
pre-emption rights in respect of a further one billion Ordinary
Shares or C Shares to enable the Company to issue its full
authority of Shares, if necessary, pursuant to the Placing
Programmes, will be posted to Shareholders today.
Indicative timetable
Publication of the Prospectus and Circular, Initial Placing, 27 September 2019
Offer for Subscription and Intermediaries
Offer open
Latest time and date for applications under the Offer for 11.00 a.m. on 15 October 2019
Subscription/Intermediaries Offer
and the payment in full under the Offer for
Subscription/Intermediaries Offer and settlement
of relevant CREST instructions (as appropriate)(2)
Latest time and date for receipt of placing commitments under 12.00 p.m. on 16 October 2019
the Initial Placing(2)
Publication of results of the Initial Issue 17 October 2019
Extraordinary General Meeting 10.00 a.m. on 17 October 2019
Initial Admission and commencement of dealings in the C Shares 8.00 a.m. on 22 October 2019
issued pursuant to the Initial
Issue
CREST accounts credited 22 October 2019
Where applicable, definitive share certificates despatched by Approximately two weeks following Initial Admission
post
Notes
(1) This is a target only and not a forecast. There can be no assurance that the target will
be met and it should not be taken as an indication of the Company's expected or actual future
results. Potential investors should not place any reliance on these targets and any investment
decision should be made exclusively on the basis of the Prospectus.
(2) The Board may, subject to prior approval from the Joint Bookrunners, bring forward or
postpone the closing time and date for the Initial Issue. In the event that such date is changed,
the Company will notify investors who have applied for Issue Shares of changes by post, email,
or by publication via a RIS.
References to times are to London times.
Dealing codes
ISIN for the Ordinary Shares GG00BFYT9H72
SEDOL for the Ordinary Shares BFYT9H7
Ticker code for the Ordinary Shares SONG
Company's Legal Entity Identifier (LEI) 213800XJIPNDVKXMOC11
ISIN for the C Shares to be issued pursuant GG00BFYT9663
to Initial Issue
SEDOL for the C Shares to be issued BFYT966
pursuant to Initial Issue
Ticker code for the C Shares to be issued SONC
pursuant to Initial Issue
For further information, please contact:
The Family (Music) Limited Tel: +44 (0)1481 742742
Merck Mercuriadis
N+1 Singer - Sponsor, Joint Bookrunner Tel: +44 (0)20 7496
and Joint Corporate Broker 3000
James Maxwell / James Moat (Corporate
Finance)
Alan Geeves / James Waterlow / Sam Greatrex
(Sales)
J.P. Morgan Cazenove - Joint Bookrunner Tel: +44 (0)20 7742
and Joint Corporate Broker 4000
William Simmonds / Ed Murray / Jérémie
Birnbaum (Corporate Finance)
James Bouverat / Eddie Nissen (Sales)
The Outside Organisation Tel: +44 (0)7711 081
Alan Edwards / Nick Caley 843
NOTES TO EDITORS
About Hipgnosis Songs Fund Limited
(www.hipgnosissongs.com)
Hipgnosis, which was founded by Merck Mercuriadis, is a Guernsey
registered investment company established to offer investors a
pure-play exposure to songs and associated musical intellectual
property rights. The Company has raised a total of approximately
GBP395 million (gross equity capital) through its Initial Public
Offering on 11 July 2018, and subsequent placings in April 2019 and
August 2019. In September 2019, Hipgnosis transferred its entire
issued share capital to the Premium listing segment of the Official
List of the FCA and to the London Stock Exchange's Premium segment
of the Main Market.
About The Family (Music) Limited
The Company's Investment Adviser is The Family (Music) Limited,
which was founded by Merck Mercuriadis, former manager of globally
successful recording artists, such as Elton John, Guns N' Roses,
Morrissey, Iron Maiden and Beyoncé, and hit songwriters such as
Diane Warren, Justin Tranter and The-Dream, and former CEO of The
Sanctuary Group plc. The Investment Adviser has assembled an
Advisory Board of highly successful music industry experts which
include award winning members of the artist, songwriter,
publishing, legal, financial, recorded music and music management
communities, all with in-depth knowledge of music publishing.
Members of The Family (Music) Limited Advisory Board include Nile
Rodgers, The-Dream, Giorgio Tuinfort, Starrah, Nick Jarjour, David
Stewart, Bill Leibowitz, Ian Montone, and Jason Flom.
IMPORTANT NOTE
The shares that will be the subject of the Initial Issue or a
Subsequent Placing under the Placing Programmes (each a "Subsequent
Placing") are not being offered or sold to any person in the
European Union, other than to "qualified investors" as defined in
Article 2.1 of Directive 2003/71/EC, which includes legal entitles
which are regulated by the Financial Conduct Authority or entities
which are not so regulated whose corporate purpose is solely to
invest in securities.
All offers of shares will be made pursuant to the Prospectus.
This announcement does not constitute or form part of, and should
not be construed as, any offer or invitation or inducement for
sale, transfer or subscription of, or any solicitation of any offer
or invitation to buy or subscribe for or to underwrite, any share
in the Company or to engage in investment activity (as defined by
the Financial Services and Markets Act 2000) in any jurisdiction
nor shall it, or any part of it, or the fact of its distribution
form the basis of, or be relied on in connection with, any contract
or investment decision whatsoever, in any jurisdiction. This
announcement does not constitute a recommendation regarding any
securities.
The information in this announcement is for information purposes
only and does not purport to be full or complete. No reliance may
be placed for any purpose on the information contained in this
announcement or its accuracy or completeness. The material set
forth herein is not intended, and should not be construed, as an
offer of securities for sale or subscription in the United States
or any other jurisdiction. Any purchase of shares should be made
solely on the basis of the information contained in the
Prospectus.
This announcement is not for publication or distribution,
directly or indirectly, in or into the United States (including its
territories and possessions, any state of the United States and the
District of Columbia), Australia, Canada, South Africa or Japan.
The distribution of this announcement may be restricted by law in
certain jurisdictions and persons into whose possession any
document or other information referred to herein comes should
inform themselves about and observe any such restriction. Any
failure to comply with these restrictions may constitute a
violation of the securities laws of any such jurisdiction.
The Company will not be registered under the US Investment
Company Act of 1940, as amended. In addition, the Company's shares
referred to herein have not been and will not be registered under
the US Securities Act of 1933 (the "Securities Act") or under the
securities laws of any state of the United States and may not be
offered or sold in the United States or to or for the account or
benefit of US persons absent registration or pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and in compliance
with any applicable State securities laws. The offer and sale of
Company's shares referred to herein has not been and will not be
registered under the Securities Act or under the applicable
securities laws of any state, province or territory of Australia,
Canada, South Africa or Japan. Subject to certain exceptions, the
Company's shares referred to herein may not be offered or sold in
Australia, Canada, South Africa or Japan or to, or for the account
or benefit of, any national, resident or citizen of Australia,
Canada, South Africa or Japan. There will be no offer of the
Company's shares in the United States, Australia, Canada, South
Africa or Japan.
N+1 Singer is authorised and regulated in the United Kingdom by
the Financial Conduct Authority, and is acting exclusively for the
Company and no-one else in connection with the Initial Issue and
each Subsequent Placing. They will not regard any other person as
their respective clients in relation to the Initial Issue and each
Subsequent Placing and will not be responsible to anyone other than
the Company for providing the protections afforded to their
respective clients, nor for providing advice in relation to the
Initial Issue and each Subsequent Placing, the contents of this
announcement or any transaction, arrangement or other matter
referred to herein.
JPMC, which is authorised by the Prudential Regulation Authority
and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the United Kingdom, is acting only for
Company in connection with the matters described in this
announcement and is not acting for or advising any other person, or
treating any other person as its client, in relation thereto and
will not be responsible for providing the regulatory protection
afforded to clients of JPMC or advice to any other person in
relation to the matters contained herein. Neither JPMC nor any of
its directors, officers, employees, advisers or agents accepts any
responsibility or liability whatsoever for this announcement, its
contents or otherwise in connection with it or any other
information relating to the Company, whether written, oral or in a
visual or electronic format.
None of the Company, the Investment Adviser, N+1 Singer or JPMC
or any of their respective affiliates accepts any responsibility or
liability whatsoever for/or makes any representation or warranty,
express or implied, as to this announcement, including the truth,
accuracy or completeness of the information in this announcement
(or whether any information has been omitted from the announcement)
or any other information relating to the Company whether written,
oral or in a visual or electronic form, and howsoever transmitted
or made available or for any loss howsoever arising from any use of
the announcement or its contents or otherwise arising in connection
therewith. The Company, the Investment Adviser, N+1 Singer and JPMC
and their respective affiliates accordingly disclaim all and any
liability whether arising in tort, contract or otherwise which they
might otherwise have in respect of this announcement or its
contents or otherwise arising in connection therewith.
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements involve known and unknown risks and uncertainties, many
of which are beyond the Company's control and all of which are
based on the Company's board of directors' current beliefs and
expectations about future events. These forward-looking statements
may be identified by the use of forward- looking terminology,
including the terms "believes", "estimates", "plans", "projects",
"anticipates", "expects", "intends", "may", "will" or "should" or,
in each case, their negative or other variations or comparable
terminology, or by discussions of strategy, plans, objectives,
goals, future events or intentions. These forward-looking
statements include all matters that are not historical facts.
Forward-looking statements may and often do differ materially from
actual results. Any forward-looking statements reflect the
Company's current view with respect to future events and are
subject to risks relating to future events and other risks,
uncertainties and assumptions relating to the Company's business,
the results of operations, financial condition prospects, growth
and dividend policy of the Company and the industry in which it
operates. Forward-looking statements speak only as of the date they
are made and cannot be relied upon as a guide to future
performance. These forward-looking statements and other statements
contained in this announcement regarding matters that are not
historical facts involve predictions. No assurance can be given
that such future results will be achieved; actual events or results
may differ materially as a result of risks and uncertainties facing
the Company. Such risks and uncertainties could cause actual
results to vary materially from the future results indicated,
expressed or implied in such forward-looking statements. Forward
looking statements speak only as of the date of this
announcement.
The Company has a limited trading history. Potential investors
should be aware that any investment in the Company is speculative,
involves a high degree of risk, and could result in the loss of all
or substantially all of their investment. Results can be positively
or negatively affected by market conditions beyond the control of
the Company or any other person. Past performance cannot be relied
upon as a guide to, or guarantee of, future performance.
Prospective investors are advised to seek expert legal, financial,
tax and other professional advice before making any investment
decision. The value of investments may fluctuate.
Information to distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("Directive 2014/65/EU"); (b)
Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593
supplementing Directive 2014/65/EU; and (c) local implementing
measures (together, the "MiFID II Product Governance
Requirements"), and disclaiming all and any liability, whether
arising in tort, contract or otherwise, which any "manufacturer"
(for the purposes of the MiFID II Product Governance Requirements)
may otherwise have with respect thereto, the Ordinary Shares and C
Shares have been subject to a product approval process, which has
determined that the Ordinary Shares and C Shares to be issued
pursuant to the Initial Issue and the Placing Programmes are: (i)
compatible with an end target market of retail investors and
investors who meet the criteria of professional clients and
eligible counterparties, each as defined in Directive 2014/65/EU;
and (ii) eligible for distribution through all distribution
channels as are permitted by Directive 2014/65/EU (the "Target
Market Assessment").
Notwithstanding the Target Market Assessment, distributors
should note that: the price of the Ordinary Shares and C Shares may
decline and investors could lose all or part of their investment;
the Ordinary Shares and the C Shares offer no guaranteed income and
no capital protection; and an investment in the Ordinary Shares
and/or C Shares is compatible only with investors who do not need a
guaranteed income or capital protection, who (either alone or in
conjunction with an appropriate financial or other adviser) are
capable of evaluating the merits and risks of such an investment
and who have sufficient resources to be able to bear any losses
that may result therefrom. The Target Market Assessment is without
prejudice to the requirements of any contractual, legal or
regulatory selling restrictions in relation to the Placing
Programmes. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, N+1 Singer and JPMC will only procure
investors who meet the criteria of professional clients and
eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of Directive 2014/65/EU; or (b) a recommendation
to any investor or group of investors to invest in, or purchase, or
take any other action whatsoever with respect to the Ordinary
Shares and/or the C Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Ordinary Shares and the C
Shares and determining appropriate distribution channels.
PRIIPS Regulation
In accordance with the Regulation (EU) No 1286/2014 of the
European Parliament and of the Council of 26 November 2014 on key
information documents for packaged retail and insurance-based
investment products (PRIIPs) and its implementing and delegated
acts (the "PRIIPs Regulation"), a key information document in
respect of the C Shares to be issued pursuant to the Initial Issue
and the Ordinary Shares has been prepared by Hipgnosis Songs Fund
Limited and is available to investors at www.hipgnosissongs.com. If
a new class of C Shares is issued under the Placing Programmes,
Hipgnosis Songs Fund Limited will make available a key information
document in relation to such class of C Shares as required under
the PRIIPs Regulation.
If you are distributing the Shares, it is your responsibility to
ensure that the relevant key information document is provided to
any clients that are "retail clients".
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IOEEDLBLKKFFBBE
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