TIDMSONG
RNS Number : 0194C
Hipgnosis Songs Fund Limited
16 June 2021
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE
UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN, OR ANY
OTHER JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, 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 TO SELL OR ISSUE, OR THE SOLICITATION OF ANY
OFFER TO PURCHASE, SUBSCRIBE FOR OR OTHERWISE ACQUIRE, ANY
SECURITIES OF 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 DATED 21 JANUARY 2021
AND ANY SUPPLEMENTARY PROSPECTUS PUBLISHED BY THE COMPANY PRIOR TO
THE DATE OF ADMISSION.
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR").
16 June 2021
Hipgnosis Songs Fund Limited ("Hipgnosis" or the "Company")
Proposed Placing
The Board of Hipgnosis, the first UK investment company offering
investors a pure-play exposure to songs and associated musical
intellectual property rights, and its Investment Adviser, The
Family (Music) Limited, are pleased to announce that the Company
intends to raise approximately GBP150 million by way of a placing
of new Ordinary Shares (the "Placing") at a price of 121 pence per
Ordinary Share (the "Issue Price").
The Company expects to use the net proceeds of the Placing to
acquire a substantial pipeline of Songs that The Family (Music)
Limited (the "Investment Adviser") has identified in line with the
Company's investment policy (the "Pipeline Songs"). The Pipeline
Songs contain some of the most influential and successful Songs of
all time, and offer substantial revenue growth opportunities
through Song Management.
Merck Mercuriadis, Founder of The Family (Music) Limited and
Hipgnosis Songs Fund Limited, said:
"I founded Hipgnosis to give the investment community access to
extraordinarily successful hit Songs by culturally important
artists and to establish Songs as a new and uncorrelated asset
class with attractive risk-adjusted returns. Three years after our
IPO the support of our shareholders has allowed us to build a
portfolio of songs with a value over $2.2 billion and Hipgnosis has
delivered a Total NAV Return of 40.7% against the most challenging
social and economic backdrop of our lives. This success has firmly
established Songs globally as one of the most attractive new asset
classes.
This raise gives our public markets investors, historic and new,
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, at valuations that
are highly attractive considering the continued explosive growth of
streaming that will magnify future revenues considerably."
Placing Highlights
-- Placing for a target issue of 123,966,942 new Ordinary Shares
(the "Placing Shares") under the Company's Placing Programme
pursuant to the prospectus published by the Company on 21 January
2021 (the "Prospectus") to raise GBP150 million
-- The Issue Price of 121 pence per Ordinary Share represents a:
o 2.4% discount to the closing Ordinary Share price of 124 pence
on 15 June 2021
o 2.0% premium to the Adjusted Operative NAV, based on the GBP
to USD exchange rate of 1.4115 on 11 June 2021 (being the latest
practicable date), of 118.57 pence per Ordinary Share (being the
last reported Operative NAV of $1.6829 per Share on 31 March 2021
as adjusted for:
(i) $0.0188 in respect of the interim dividend of 1.3125 pence
per Ordinary Share for the three month period from 1 January 2021
to 31 March 2021, which was declared "ex" and paid in May 2021 in
respect of the Ordinary Shares in issue at that time,
(ii) unaudited accrued earnings of $0.0133 per Ordinary Share
for the 2 1/2 month period from 1 April 2021 to 11 June 2021,
and
(iii) decrease in the Fair Value of the catalogues owned at 31
March 2021 of $0.0038 per Ordinary Share to reflect the
strengthening of the GBP to USD exchange rate from 1.3738 on 31
March 2021 to 1.4115 on 11 June 2021)
-- N+1 Singer Capital Markets Limited ("N+1 Singer"), J.P.
Morgan Securities plc (which conducts its UK investment banking
activities as J.P. Morgan Cazenove) ("JPMC") and RBC Europe Limited
(trading as RBC Capital Markets) ("RBC") are acting as joint
bookrunners in connection with the Placing (the "Joint
Bookrunners")
-- Separate to the Placing, the Company is currently considering
a refinancing of its existing Revolving Credit Facility
Proposed Placing under the Placing Programme
Hipgnosis will target an issue of 123,966,942 Placing Shares
pursuant to the Placing. The final number of Placing Shares will be
agreed between the Company and Joint Bookrunners following close of
the Placing, and announced shortly thereafter. The Board reserves
the right, in consultation with the Investment Adviser and Joint
Bookrunners, to increase the size of the Placing if overall demand
exceeds 123,966,942 Placing Shares by reallocating new Ordinary
Shares that would otherwise be available under the Placing
Programme.
The Placing shall commence immediately following this
announcement and will be closed at 11 a.m. on 6 July 2021 but may
be closed earlier or later at the discretion of the Company and the
Joint Bookrunners.
The Joint Bookrunners may choose to accept applications, either
in whole or in part, on the basis of allocations determined in
agreement with the Company, and may scale back any applications for
this purpose on such basis as the Company and the Joint Bookrunners
may determine. The Joint Bookrunners may also, notwithstanding the
above and subject to the prior consent of the Company: (i) allocate
Placing Shares after the time of any initial allocation to any
person submitting an application after that time, and (ii) allocate
Placing Shares after the Placing has closed to any person
submitting an application after that time. The Company's Board, in
consultation with the Joint Bookrunners, may also decide not to
proceed with the Placing for any reason. In this case, an
announcement will be made by the Company. Application will be made
to the London Stock Exchange for any Placing Shares issued pursuant
to the Placing to be admitted 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 ("Admission").
The Placing will be made on a non-pre-emptive basis. The Placing
is conditional upon, inter alia, Admission becoming effective on or
before 9 July 2021 or at a later date at the discretion of the
Company and the Joint Bookrunners.
The Placing is being made pursuant to the terms and conditions
set out in Part XII (Terms and Conditions of Placings) of the
Prospectus. Investors are invited to apply for Placing Shares
pursuant to the Placing by contacting their usual contact at N+1
Singer, JPMC or RBC.
A copy of the Prospectus published by the Company on 21 January
2021 is available on the Company's website www.hipgnosissongs.com,
subject to certain access restrictions. It is also available for
inspection at the Company's Administrator's office, Ocorian
Administration (Guernsey) Limited, P.O. Box 286, Floor 2, Trafalgar
Court, Les Banques, St. Peter Port, Guernsey, GY1 4LY. It can also
be found at the National Storage Mechanism via
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Expected Timetable of Principal Events
Date of this Announcement 16 June 2021
Latest time and date for receipt of placing 11 a.m. on 6
commitments under the Placing July 2021
Publication of results of the Placing by 7 July 2021
Admission and commencement of dealings in the 8:00 a.m. on 9
Placing Shares July 2021
Dealing codes
ISIN for the Ordinary Shares to be issued GG00BFYT9H72
pursuant to the Placing
SEDOL for the Ordinary Shares traded in BFYT9H7
Sterling
SEDOL for the Ordinary Shares traded in BLH8YF6
US Dollars
Ticker code for the Ordinary Shares traded SONG
in Sterling
Ticker code for the Ordinary Shares traded SOND
in US Dollars
Subsequent to the Placing, the Company does not currently intend
to offer further shares for cash consideration until after
publication of the net asset value per Share as at 31 March
2022.
For further information, please contact:
The Family (Music) Limited Tel: +44 (0)1481
Merck Mercuriadis 742742
N+1 Singer - Joint Corporate Broker Tel: +44 (0)20
James Maxwell / James Moat / Amanda Gray / 7496 3000
Alaina Wong (Corporate Finance)
Alan Geeves / James Waterlow / Sam Greatrex
(Sales)
J.P. Morgan Cazenove - Joint Corporate Broker Tel: +44 (0)20
William Simmonds / Jérémie Birnbaum 7742 4000
(Corporate Finance)
James Bouverat (Sales)
RBC Capital Markets - Joint Corporate Broker Tel: +44 (0)20
Elliot Thomas / Max Avison (Corporate Finance) 7635 4000
Lisa Tugwell / Adam Robertson (Sales)
Ocorian - Company Secretary & Administrator Tel: +44 (0) 28
Lorna Zimny 9693 0222
The Outside Organisation Tel: +44 (0)7711
Alan Edwards / Nick Caley 081 843
FTI Consulting Tel: +44 (0)7771
Neil Doyle/ Paul Harris/ Laura Ewart 978220; +44 (0)7809
411882; +44 (0)7761
332646
All US music publicity enquiries
Fran Defeo +1 917 767 5255
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 over GBP1.1
billion (gross equity capital) through its Initial Public Offering
on 11 July 2018, and subsequent issues in April 2019, August 2019,
October 2019, July 2020, September 2020 and February 2021. 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, and in March 2020 became a constituent of the FTSE 250
Index. Since April 2021, the Company has been resident in the UK
for tax purposes and is recognised as an investment trust under
applicable HMRC regulations.
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
A. Stewart, Bill Leibowitz, Ian Montone and Rodney Jerkins.
IMPORTANT NOTE
All offers of shares under the Placing will be made pursuant to
the Prospectus (as may be supplemented by a supplementary
prospectus from time to time). 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 to sell or issue, or the solicitation of any offer to
purchase, subscribe for or otherwise acquire, any securities 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 (as may be supplemented by a supplementary
prospectus from time to time).
This announcement is not for publication or distribution,
directly or indirectly, to "U.S. persons" ("US Persons") as defined
in Regulation S under the US Securities Act of 1933, as amended
(the "Securities Act") or 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 has not been and will not be registered under the US
Investment Company Act of 1940, as amended (the "Investment Company
Act"). In addition, the Company's shares referred to herein have
not been and will not be registered under the Securities Act, or
under the securities laws of any state or other jurisdiction of the
United States and may not be offered, sold, resold, pledged,
transferred or delivered, directly or indirectly, into or within
the United States or to, or for the account or benefit of, any US
Persons, except 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 securities laws of any state
or other jurisdiction of the United States and in a manner which
would not require the Company to register under the Investment
Company Act. The offer and sale of Company's shares referred to
herein has not been and will not be registered 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 has been and will be no public
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 ("FCA"), and is acting exclusively
for the Company and no-one else in connection with the Placing. N+1
Singer will not regard any other person as its clients in relation
to Placing and will not be responsible to anyone other than the
Company for providing the regulatory protections afforded to its
clients, nor for providing advice in relation to the 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
("PRA") and regulated by the FCA and the PRA in the United Kingdom,
is acting only for the Company in connection with the Placing 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 protections 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.
RBC, which is authorised by the PRA and regulated by the FCA and
the PRA in the United Kingdom, is acting only for the Company in
connection with the Placing 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 protections afforded to clients of RBC or advice to any
other person in relation to the matters contained herein. Neither
RBC 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, RBC 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 this 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 this announcement or its
contents or otherwise arising in connection therewith. The Company,
the Investment Adviser, N+1 Singer, RBC 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 contained
herein speak only as of the date of this announcement.
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: the FCA's PROD3 Rules on product governance
within the FCA Handbook (the "FCA PROD3 Rules"), and disclaiming
all and any liability, whether arising in tort, contract or
otherwise, which any "manufacturer" (for the purposes of the FCA
PROD3 Rules) may otherwise have with respect thereto, the Ordinary
Shares the subject of the Placing have been subject to a product
approval process, which has determined that such Ordinary Shares
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 FCA Glossary; and (ii)
eligible for distribution through all distribution channels as are
permitted by the FCA PROD3 Rules (the "Target Market
Assessment").
Notwithstanding the Target Market Assessment, Distributors
should note that: the price of the Ordinary Shares may decline and
investors could lose all or part of their investment; the Ordinary
Shares offer no guaranteed income and no capital protection; and an
investment in the Ordinary 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. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, the Joint Bookrunners 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 the FCA PROD3 Rules; 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.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Ordinary Shares and determining
appropriate distribution channels.
PRIIP s Regulation
In accordance with the UK version of the EU PRIIPs Regulation
(1286/2014) which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018, as amended (the "UK PRIIPs Laws"), a key
information document in respect of an investment in the Ordinary
Shares has been prepared by the Company and is available to
investors at www.hipgnosissongs.com .
If you are distributing any class of shares in the Company, it
is your responsibility to ensure that the relevant key information
document is provided to any clients that are "retail clients".
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IOEDDGDLUGBDGBU
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