SONG Hipgnosis Songs Fund Limited

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

3 June 2024

REVISED RECOMMENDED CASH ACQUISITION

of

HIPGNOSIS SONGS FUND LIMITED

by

LYRA BIDCO LIMITED

(a newly-formed company indirectly wholly-owned by investment funds advised by affiliates of Blackstone Inc.)

to be implemented by means of a scheme of arrangement under Part VIII of the Companies (Guernsey) Law, 2008 (as amended)

1.   Introduction

On 29 April 2024, the boards of directors of Lyra Bidco Limited ("Bidco") and Hipgnosis Songs Fund Limited ("Hipgnosis") jointly announced (the "29 April Announcement") that they had reached agreement on the terms and conditions of a recommended all cash acquisition (the "Initial Offer") by Bidco of the entire issued, and to be issued, ordinary share capital of Hipgnosis (the "Acquisition"), to be effected by means of a takeover offer for the purposes of section 337 of the Companies Law (an "Offer").

The Bidco Board and Hipgnosis Board subsequently announced on 24 May 2024 (the "24 May Announcement") that, with the consent of the Panel, there would be a short delay in the posting of the Offer Document in respect of the Initial Offer and that Bidco would post the Offer Document no later than 3 June 2024.

In response to a briefing paper, the CMA has confirmed in writing that it requires no further information on the Acquisition at this stage. Accordingly, Condition (as defined in the 29 April Announcement) 2.1.1 to the Acquisition, as set out in Part A of Appendix 1 to the 29 April Announcement, is therefore satisfied, provided that the CMA shall not have raised or otherwise indicated to the parties that it has outstanding questions relating to the Acquisition at the time all other Conditions to the Acquisition are satisfied. Completion of the Acquisition remains subject to the satisfaction (or, where applicable, waiver) of the outstanding Conditions.

Capitalised terms which are not otherwise defined in this announcement have the same meanings as set out in the 29 April Announcement.

2.   Revised Offer and switch to a Scheme

The Bidco Board and the Hipgnosis Board are pleased to announce that they have reached agreement on the terms and conditions of an increased and revised recommended cash acquisition (the "Revised Offer") by Bidco in respect of the Acquisition.

The Panel on Takeovers and Mergers (the "Panel") has granted its consent under Section 8 of Appendix 7 of the City Code on Takeovers and Mergers (the "Takeover Code") for the Acquisition to be implemented by way of a scheme of arrangement under Part VIII of the Companies Law (a "Scheme") on the basis set out in paragraph 4 of this announcement.

Further details of the Scheme, including expected times and dates for each of the Court Meeting, the General Meeting and the relevant hearing at which the Scheme would be sanctioned (the "Sanction Hearing"), together with notices of the Court Meeting and General Meeting, will be set out in the Scheme Document. With the consent of the Panel, the Scheme Document and the forms of proxy accompanying the Scheme Document will be published as soon as practicable and, in any event, by no later than 14 June 2024 (or such later date as Bidco and Hipgnosis may, with the consent of the Panel, agree and, if required, the Court may approve).

3.   Revised Offer Price

Under the terms of the Revised Offer, each Hipgnosis Shareholder will be entitled to receive:

for each Hipgnosis Share: $1.31 in cash

The GBP equivalent value of the Revised Offer price of $1.31 in cash per Hipgnosis Share (the "Revised Offer Price") based on the Announcement Exchange Rate, being 105 pence, represents a premium of approximately:

·    49.2 per cent. to the Closing Price of 71 pence per Hipgnosis Share on 17 April 2024 (being the last Business Day before the commencement of the Offer Period);

·    54.8 per cent. to the volume-weighted average price of 68 pence per Hipgnosis Share for the one-month period ended 17 April 2024 (being the last Business Day before the commencement of the Offer Period); and

·    59.3 per cent. to the volume-weighted average price of 66 pence per Hipgnosis Share for the three-month period ended 17 April 2024 (being the last Business Day before the commencement of the Offer Period).

The Revised Offer values Hipgnosis' entire issued, and to be issued, ordinary share capital at approximately $1,584 million (which is equivalent to £1,272 million based on the Announcement Exchange Rate).

The increase of $0.01 per Hipgnosis Share from the Acquisition Price to the Revised Offer Price has come about as a result of discussions between the Hipgnosis Board, Bidco Board and their respective advisers and in part reflects Hipgnosis incurring lower adviser fees in respect of the transaction than previously expected.

For the purposes of this announcement, a Scheme Share means any Hipgnosis Share which is:

(a)  in issue as at the date of the Scheme Document and which remains in issue as at the time and date to be specified in the Scheme Document, expected to be 6.00 p.m. on the Business Day immediately following the date of the Sanction Hearing (the "Scheme Record Time");

(b)  (if any) issued after the date of the Scheme Document, but at or before the Voting Record Time and which remain in issue at the Scheme Record Time; and

(c)  (if any) issued after the Voting Record Time but at or before the Scheme Record Time, either on terms that the original or any subsequent holder thereof shall be bound by the Scheme, or in respect of which the original or any subsequent holder is, or shall agreed in writing to be, bound by the Scheme and which remain in issue at the Scheme Record Time,

in each case other than any Hipgnosis Shares which are: (i) registered in the name of, or beneficially owned by, Bidco or any other member of the Wider Bidco Group or any of their respective nominees; or (ii) held as treasury shares, in each case at the relevant time.

Bidco will procure that a facility will be made available under which any holder of Scheme Shares at any relevant date or time (each, a "Scheme Shareholder") will be able to elect (subject to the terms and conditions of the facility) to receive the cash consideration in Sterling (after deduction of any transaction or dealing costs associated with the conversion) at the applicable market exchange rate on the latest practicable date for fixing such rate prior to the relevant payment date. Further details of this facility and the election to be made by Scheme Shareholders wishing to receive their cash consideration in Sterling will be set out in the Scheme Document and the Form of Election. On the basis of the Announcement Exchange Rate, the cash consideration implies an equivalent value of 105 pence per Scheme Share. For any Scheme Shareholder electing to be paid their cash consideration in Sterling, the amount per Scheme Share received may, depending on the prevailing exchange rate, result in a payment below or above 105 pence per Scheme Share.

The Scheme Shares will be acquired pursuant to the Acquisition fully paid and free from all liens, charges, equities, encumbrances, rights of pre‑emption and any other interests of any nature whatsoever and together with all rights attaching thereto, including without limitation voting rights and the right to receive and retain in full all dividends and other distributions (if any) announced, declared, made or paid with a record date on or after the date of this announcement.

An updated valuation report will be included within the Scheme Document.

If, on or after the date of the 29 April Announcement and prior to completion of the Acquisition, any dividend and/or other distribution is announced, declared, made or paid or becomes payable in respect of the Hipgnosis Shares with a record date prior to completion of the Acquisition, Bidco reserves the right to reduce the consideration payable under the terms of the Acquisition for the Hipgnosis Shares by an amount up to the aggregate amount of such dividend and/or distribution, in which case any reference in this announcement to the consideration payable under the terms of the Acquisition will be deemed to be a reference to the consideration as so reduced. Any exercise by Bidco of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Revised Offer or the Acquisition. In such circumstances, Hipgnosis Shareholders would be entitled to retain any such dividend or distribution declared, made or paid.

4.   Switch to a Scheme and Follow-on Offer in the event of a Scheme Lapse

Having taken various considerations into account, including the fact that the Initial Offer would have been subject to the Acceptance Condition of 55 per cent. of the voting rights then exercisable at a general meeting of Hipgnosis Shareholders, the Panel has (at the request of Bidco and having considered the views of the Hipgnosis Board and Singer Capital Markets in its capacity as Rule 3 Adviser to Hipgnosis) granted its consent under Section 8 of Appendix 7 of the Takeover Code to be implemented by way of a Scheme, subject to the following condition.

In summary, the Panel has ruled that, in the event that:

(a)        the Scheme in respect of the Revised Offer is treated as having "lapsed", that is, if it is withdrawn or fails to become effective; or

(b)        the Panel is satisfied that there is a reasonable likelihood that the Scheme will be withdrawn or fail to become effective,

in each case for a reason or reasons which, in the opinion of the Panel, would not have caused the Initial Offer to lapse, (each, a "Scheme Lapse") Bidco must announce and make a new Offer on the basis set out below (the "Follow-on Offer").

If a Scheme Lapse occurs, Bidco must:

·    immediately announce a firm intention to make the Follow-on Offer in accordance with Rule 2.7 of the Takeover Code (the "Follow-on Announcement"); and

·    within two Business Days of the Scheme Lapse having occurred, make the Follow-on Offer by publishing the Offer Document under and in accordance with Rule 24 of the Takeover Code.

The Follow-on Offer as described in the Follow-on Announcement and as made by Bidco in the Offer Document will be:

·    at the price of the Revised Offer at the time of the Scheme Lapse; and

·    otherwise on the same terms and conditions as the Initial Offer, including the Acceptance Condition, as set out in the 29 April Announcement, of such number of Hipgnosis Shares as shall, when aggregated with Hipgnosis Shares acquired or unconditionally agreed to be acquired (whether pursuant to the Offer or otherwise) by Bidco, represent Hipgnosis Shares carrying not less than 55 per cent. of the voting rights then exercisable at a general meeting of Hipgnosis Shareholders (or such lower percentage as Bidco may decide), provided that Bidco shall hold or have acquired or agreed to acquire (whether pursuant to the Offer or otherwise) directly or indirectly, Hipgnosis Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Hipgnosis.

5.   Intentions for Hipgnosis

The Revised Offer does not change Bidco's intentions as regards Hipgnosis as set out in the 29 April Announcement.

6.   Recommendation

In light of the terms of the Revised Offer as compared to the Initial Offer, the Hipgnosis Directors, who have been so advised by Singer Capital Markets as to the financial terms of the Revised Offer, unanimously consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Hipgnosis Directors, Singer Capital Markets has taken into account the commercial assessments of the Hipgnosis Directors. Singer Capital Markets is providing independent financial advice to the Hipgnosis Directors for the purposes of Rule 3 of the Takeover Code.

Accordingly, the Hipgnosis Directors intend to recommend unanimously that Scheme Shareholders should vote in favour of the Scheme at the requisite Court Meeting and that Hipgnosis Shareholders vote in favour of the Resolutions at a General Meeting of Hipgnosis Shareholders (or, in the event that the Acquisition is implemented by way of an Offer, that Hipgnosis Shareholders accept or procure acceptance of the Offer), and have irrevocably undertaken to do so in respect of their own beneficial holdings totalling in aggregate 327,796 Hipgnosis Shares, representing approximately 0.027 per cent. of the issued share capital of Hipgnosis as at the close of business on 31 May 2024 (being the Business Day prior to the date of this announcement). Further details of these undertakings, including the circumstances in which they cease to be binding, are set out in Appendix 3 to this announcement.

7.   Irrevocable Undertakings

As set out in the 24 May Announcement, Bidco has received irrevocable undertakings from the Hipgnosis Directors who hold Hipgnosis Shares to vote (or, where applicable, procure voting) in favour of the resolutions relating to the Scheme and the Acquisition at the Meetings (or in the event that the Acquisition is implemented by an Offer, to accept or procure acceptance of such Offer), in respect of, in aggregate, 327,796 Hipgnosis Shares (representing approximately 0.027 per cent. of the existing issued ordinary share capital of Hipgnosis as at 31 May 2024, being the last Business Day before the date of this announcement). These undertakings will remain binding in the event that a higher competing offer for Hipgnosis is made.

As further set out in the 24 May Announcement, Bidco has also received irrevocable undertakings from certain Hipgnosis Shareholders who are close relatives of certain of the Hipgnosis Directors to vote (or, where applicable, procure voting) in favour of the resolutions relating to the Scheme and the Acquisition at the Meetings (or in the event that the Acquisition is implemented by an Offer, to accept or procure acceptance of such Offer), in respect of, in aggregate, 50,000 Hipgnosis Shares (representing approximately 0.004 per cent. of the existing issued ordinary share capital of Hipgnosis as at 31 May 2024, being the last Business Day before the date of this announcement). These undertakings will also remain binding in the event that a higher competing offer for Hipgnosis is made.

Bidco has, therefore, received irrevocable undertakings in respect of a total of 377,796 Hipgnosis Shares (representing approximately 0.03 per cent. of the existing issued ordinary share capital of Hipgnosis as at 31 May 2024, being the last Business Day before the date of this announcement).

Further details of these irrevocable undertakings, including the circumstances in which they cease to be binding, are set out in Appendix 3 to this announcement.

8.   Financing of the Acquisition

The cash consideration payable to Hipgnosis Shareholders under the terms of the Revised Offer will be financed by an equity investment into Bidco from the Blackstone Funds.

Jefferies, in its capacity as financial adviser to Bidco, is satisfied that sufficient resources are available to Bidco to satisfy in full the cash consideration payable to Hipgnosis Shareholders under the terms of the Revised Offer.

Further information on the financing of the Acquisition will be set out in the Scheme Document.

9.   A&R Cooperation Agreement

In connection with the Revised Offer, Bidco and Hipgnosis have entered into an amended and restated cooperation agreement in relation to the cooperation agreement previously entered into between Bidco and Hipgnosis on 29 April 2024, as amended and restated on 9 May 2024 (the "A&R Cooperation Agreement"). Under the terms of the A&R Cooperation Agreement, Bidco and Hipgnosis have, amongst other things, each agreed to cooperate in certain matters relating to obtaining regulatory clearances in relation to the Acquisition. In addition, Bidco may elect to implement the Acquisition by means of an Offer, in the event of which Bidco has agreed to certain provisions if the Scheme should switch to an Offer.  The A&R Cooperation Agreement will terminate in certain circumstances, including if the Acquisition is withdrawn, terminated or lapses, a third party announces a possible or firm intention to make an offer for Hipgnosis which completes, becomes effective or becomes unconditional, or if prior to the Long Stop Date any Condition has been invoked by Bidco (with the consent of the Panel), if the Hipgnosis Directors withdraw their recommendation of the Acquisition or if completion of the Acquisition does not occur in accordance with its terms by the Long Stop Date or otherwise as agreed between Bidco and Hipgnosis. Pursuant to the terms of the A&R Cooperation Agreement, Bidco undertakes that it will inform Hipgnosis confirming if, to the extent permitted by the Panel, it intends to invoke or treat as unsatisfied or incapable of satisfaction one or more Conditions.

10. Disclosures

Bidco confirms that there have been no changes to the Disclosure of Interests in Hipgnosis Securities in paragraph 10 of the 29 April Announcement.

11. Timetable and conditions

It is intended that, having received consent from the Panel and the Hipgnosis Board, the Acquisition will be implemented by way of a Scheme (although Bidco reserves the right to elect to implement the Acquisition by means of an Offer, subject to the Panel's consent and the terms of the A&R Cooperation Agreement).

"Condition" shall mean each of the conditions listed in Part A of Appendix 1 to this announcement and any reference to a numbered Condition shall be a reference to the Condition set out in the paragraph of Part A of Appendix 1 to this announcement bearing such number.

In response to a briefing paper, the CMA has confirmed in writing that it requires no further information on the Acquisition at this stage. Accordingly, Condition 3.1.1 to the Acquisition, as set out in Part A of Appendix 1 to this announcement, is therefore satisfied, provided that the CMA shall not have raised or otherwise indicated to the parties that it has outstanding questions relating to the Acquisition at the time all other Conditions to the Acquisition are satisfied.  

The Acquisition remains subject to the satisfaction or, where applicable, waiver of the outstanding Conditions, which are set out in full in Appendix 1 to this announcement along with certain other terms, and to the full terms and conditions to be set out in the Scheme Document, and will only become effective in accordance with its terms ("Effective") if, among other things, the following events occur on or before the Long Stop Date (or such later date as Bidco and Hipgnosis may, with the consent of the Panel, agree and, if required, the Court may approve):

·    the resolution to approve the Scheme is passed by a majority in number of Scheme Shareholders present and voting (and entitled to vote) at the Court Meeting, either in person or by proxy, representing 75 per cent. or more of the voting rights held by those Hipgnosis Shareholders;

·    the Resolution necessary to implement the Scheme and the Acquisition is passed by the requisite majority of Hipgnosis Shareholders at the General Meeting;

·    following the Meetings and satisfaction and/or waiver (where applicable) of the other Conditions, the Scheme is sanctioned by the Court (without modification, or with modification on terms agreed by the Bidco and Hipgnosis) at the Sanction Hearing; and

·    following such sanction at the Sanction Hearing, a copy of the order of the Court sanctioning the Scheme (the "Court Order") is delivered to the Guernsey Registrar.

The Conditions in paragraphs 1 and 2 of Part A of Appendix 1 to this announcement provide that the Scheme will lapse (under the authority of Rule 13.5(b) of the Takeover Code) if:

·    the Court Meeting and the General Meeting not being held on or before the 21st day after the expected date of the Meetings as set out in the Scheme Document when published (or such later date, if any, as the Panel may consent to);

·    the Sanction Hearing to approve the Scheme not being held on or before the 21st day after the expected date of the Sanction Hearing as set out in the Scheme Document when published (or such later date, if any, as the Panel may consent to); or

·    the Scheme does not become Effective by 11.59 p.m. on the Long Stop Date (or such later date as Bidco and Hipgnosis may, with the consent of the Panel, agree and (if required) the Court may allow).

If any Condition in paragraph 2 of Part A of Appendix 1 to this announcement is not capable of being satisfied by the date specified therein, Bidco shall make an announcement through a Regulatory Information Service as soon as practicable and, in any event, by not later than 8.00 a.m. on the Business Day following the date so specified, stating whether Bidco has invoked that Condition, (where applicable) waived that Condition or, with the agreement of Hipgnosis, specified a new date by which that Condition must be satisfied.

Once the necessary approvals from Hipgnosis Shareholders have been obtained and the other Conditions have been satisfied or (where applicable) waived and the Scheme has been approved by the Court, the Scheme will become Effective upon delivery of a copy of the Court Order to the Guernsey Registrar.

Subject to the satisfaction or (where applicable) waiver of the Conditions, the Acquisition continues to be expected to complete during the third quarter of 2024.

Upon the Scheme becoming Effective: (i) it will be binding on all Hipgnosis Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting (and if they attended and voted, whether or not they voted in favour); and (ii) share certificates in respect of Hipgnosis Shares will cease to be valid and entitlements to Hipgnosis Shares held within the CREST system will be cancelled. In accordance with the applicable provisions of the Takeover Code, the consideration for the transfer of the Hipgnosis Shares to Bidco will be despatched to shareholders no later than 14 days after the date on which the Scheme becomes Effective (the "Effective Date").

The Resolution to be proposed at the General Meeting will, amongst other matters, provide that the Articles be amended to incorporate provisions requiring any Hipgnosis Shares issued after the Scheme Record Time to be automatically transferred to Bidco on the same terms as the Acquisition (other than terms as to timings and formalities). The provisions of the Articles (as amended) will avoid any person (other than Bidco and their nominees) holding shares in the capital of Hipgnosis after the Effective Date.

Further details of the Scheme, including expected times and dates for each of the Court Meeting, the General Meeting and the Sanction Hearing, together with notices of the Court Meeting and the General Meeting, will be set out in the Scheme Document. With the consent of the Panel, the Scheme Document and the forms of proxy accompanying the Scheme Document will be published as soon as practicable and in any event by no later than 14 June 2024 (or such later date as Bidco and Hipgnosis may, with the consent of the Panel, agree and, if required, the Court may approve).

12. Documents

Copies of the following documents will be available promptly, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Hipgnosis' website at https://communications.singercm.com/p/4UWI-EVY/blackstone-recommended-offer-hipgnosis and on Bidco's website at https://www.announcement-documents.com/ in any event by no later than noon on the Business Day following this announcement:

·    this announcement;

·    the A&R Cooperation Agreement;

·    the documents entered into for the financing of the Acquisition referred to in paragraph 8 above; and

·    the consent letters from Jefferies, Singer Capital Markets and Shot Tower to being named in this announcement.

Neither the content of the website referred to in this announcement, nor any website accessible from any hyperlinks set out in this announcement, are incorporated into or form part of this announcement.

Subject to certain restrictions relating to persons resident in Restricted Jurisdictions, the Scheme Document, once published, will also be made available on Hipgnosis' website at https://communications.singercm.com/p/4UWI-EVY/blackstone-recommended-offer-hipgnosis and on Bidco's website at https://www.announcement-documents.com/.

13. General

Bidco reserves the right to elect (with the consent of the Panel and subject to the terms of the A&R Cooperation Agreement) to implement the acquisition of the Hipgnosis Shares by means of an Offer as an alternative to the Scheme. In such event, the Offer will be implemented on substantially the same terms, other than the Acquisition Price being increased to the price of the Revised Offer, so far as applicable and subject to appropriate amendments, as those which would apply to the Initial Offer, including the Acceptance Condition as set out in the 29 April Announcement.

Investors should be aware that Bidco may purchase Hipgnosis Shares otherwise than under the Scheme or any Offer, including pursuant to privately negotiated purchases.

The Acquisition will be on the terms and subject to the conditions set out herein and in Appendix 1, and to be set out in the Scheme Document. The bases and sources for certain financial information contained in this announcement are set out in Appendix 2 of this announcement. Details of irrevocable undertakings received by Bidco are set out in Appendix 3. The formal Scheme Document will be sent to Hipgnosis Shareholders by no later than 14 June 2024 (or such later date as Bidco and Hipgnosis may, with the consent of the Panel, agree and, if required, the Court may approve).

Jefferies (as sole financial adviser to Bidco) and Singer Capital Markets (as sole financial adviser to Hipgnosis) have each given and not withdrawn their consent to the publication of this announcement with the inclusion herein of the references to their names in the form and context in which they appear.

This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.

This announcement should be read in conjunction with the 29 April Announcement and in conjunction with, and is subject to, the Appendices to this announcement and (to the extent applicable) Appendix 3 to the 29 April Announcement.

Enquiries

Kirkland & Ellis International LLP is acting as legal adviser to Bidco and Blackstone in connection with the Acquisition. Ogier (Guernsey) LLP is acting as Guernsey legal adviser to Bidco.

Shoosmiths LLP is acting as UK legal adviser in connection with the Acquisition. Carey Olsen (Guernsey) LLP is acting as Guernsey legal adviser to Hipgnosis.

Further information

Jefferies International Limited ("Jefferies"), which is authorised and regulated in the UK by the FCA, is acting as financial adviser to Blackstone and Bidco and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Blackstone and Bidco for providing the protections offered to clients of Jefferies or for providing advice in connection with any matter referred to in this announcement. Neither Jefferies nor any of its affiliates (nor their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Jefferies in connection with this announcement, any statement contained herein, the Offer or otherwise. No representation or warranty, express or implied, is made by Jefferies as to the contents of this announcement.

Singer Capital Markets Advisory LLP ("Singer Capital Markets"), which is authorised and regulated in the United Kingdom by the FCA, is acting as sole Rule 3 adviser, financial adviser and corporate broker exclusively for Hipgnosis and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Hipgnosis for providing the protections afforded to clients of Singer Capital Markets nor for providing advice in connection with the matters referred to herein.

This announcement is for information purposes only and is not intended to, and does not, constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Hipgnosis in any jurisdiction in contravention of applicable law.  The Acquisition will be implemented solely pursuant to the terms of the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the Offer Document), which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition.  Any response in relation to the Acquisition, or if the Acquisition is implemented by way of a Scheme, any vote in respect of the Scheme should be made only on the basis of the information contained in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the Offer Document).

This announcement does not constitute a prospectus, prospectus equivalent document or exempted document.

This announcement contains inside information in relation to Hipgnosis for the purposes of Article 7 of the Market Abuse Regulation. Hipgnosis' Legal Entity Identifier is 213800XJIPNDVKXMOC11.

If you are in any doubt about the contents of this announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

Overseas shareholders

The release, publication or distribution of this announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves of, and observe, any applicable legal or regulatory requirements.  Any failure to comply with such requirements may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared in accordance with and for the purpose of complying with English law, Guernsey law, the Takeover Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

The availability of the Acquisition to Hipgnosis Shareholders who are not resident in and citizens of the UK may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens.  Persons who are not resident in the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions.  Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.  Further details in relation to Overseas Shareholders will be contained in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the Offer Document).

Unless otherwise determined by Bidco or required by the Takeover Code, and permitted by applicable law and regulation, the Acquisition will not be made available, in whole or in part, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Acquisition by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction.  Copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including, without limitation, agents, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction.  Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of an Offer (unless otherwise permitted by applicable law and regulation), the Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

Further details in relation to Overseas Shareholders will be included in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the Offer Document).

Notice to U.S. Hipgnosis Shareholders

The Acquisition relates to the shares of a Guernsey company with a listing on the London Stock Exchange and is being made by means of takeover offer. A transaction effected by means of a scheme of arrangement is not subject to the tender offer or proxy solicitation rules under the U.S. Securities Exchange Act of 1934 (the "U.S. Exchange Act").  Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in Guernsey to takeover offers and schemes of arrangement which differ from the disclosure requirements of the U.S. tender offer and proxy solicitation rules. The financial information included in this announcement has been prepared in accordance with generally accepted accounting principles of the UK and thus may not be comparable to financial information of U.S. companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

If, in the future, Bidco exercises its right to implement the Acquisition by way of an Offer, which is to be made into the United States, such Offer will be made in compliance with the applicable U.S. laws and regulations.

It may be difficult for U.S. holders of Hipgnosis Shares to enforce their rights and any claim arising out of the U.S. federal laws, since Bidco and Hipgnosis are located in a non-U.S. jurisdiction, and some or all of their officers and directors may be residents of a non-U.S. jurisdiction.  U.S. holders of Hipgnosis Shares may not be able to sue a non-U.S. company or its officers or directors in a non-U.S. court for violations of the U.S. securities laws.  Further, it may be difficult to compel a non-U.S. company and its affiliates to subject themselves to a U.S. court's judgement.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the U.S. Exchange Act, Blackstone or its nominees, or their brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Hipgnosis Shares outside of the U.S., other than pursuant to the Acquisition, until the date on which completion of the Acquisition occurs, lapses or is otherwise withdrawn.  Also, in accordance with Rule 14e-5(b) of the U.S. Exchange Act, Jefferies will continue to act as an exempt principal trader in Hipgnosis shares on the London Stock Exchange.  These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices.  Any information about such purchases will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website, www.londonstockexchange.com.

U.S. Hipgnosis Shareholders also should be aware that the transaction contemplated herein may have tax consequences in the U.S. and, that such consequences, if any, are not described herein.  U.S. Hipgnosis Shareholders are urged to consult with legal, tax and financial advisers in connection with making a decision regarding this transaction.

Forward looking statements

This announcement (including information incorporated by reference in this announcement), statements made regarding the Acquisition, and other information published by Bidco and Hipgnosis contain statements which are, or may be deemed to be, "forward-looking statements".  Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Bidco and Hipgnosis about future events and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.

The forward-looking statements contained in this announcement include statements relating to the expected effects of the Acquisition on Bidco and Hipgnosis (including their future prospects, developments and strategies), the expected timing and scope of the Acquisition and other statements other than historical facts.  Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "prepares", "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "projects", "synergy", "strategy", "scheduled", "goal", "estimates", "forecasts", "cost-saving", "intends", "target", "aims", "anticipates", "continues", or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved.  Forward looking statements may include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Bidco's, Hipgnosis', any member of the Bidco Group's or any member of the Hipgnosis Group's operations and potential synergies resulting from the Acquisition; and (iii) the effects of global economic conditions and governmental regulation on Bidco's, Hipgnosis', any member of the Bidco Group's or any member of the Hipgnosis Group's business.

Although Bidco and Hipgnosis believe that the expectations reflected in such forward-looking statements are reasonable, Bidco and Hipgnosis can give no assurance that such expectations will prove to be correct.  By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.  There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to complete the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms and schedule; changes in the global political, economic, business and competitive environments and in market and regulatory forces; changes in future exchange and interest rates; changes in tax rates; future business combinations or disposals; changes in general economic and business conditions; changes in the behaviour of other market participants; changes in the anticipated benefits from the Acquisition not being realised as a result of changes in general economic and market conditions in the countries in which Bidco and Hipgnosis operate, weak, volatile or illiquid capital and/or credit markets, changes in tax rates, interest rate and currency value fluctuations, the degree of competition in the geographic and business areas in which Bidco and Hipgnosis operate and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those expected, estimated or projected in the forward-looking statements.  If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions proves incorrect, actual results may differ materially from those expected, estimated or projected. Such forward-looking statements should therefore be construed in the light of such factors.  Neither Bidco nor Hipgnosis, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur.  You are cautioned not to place any reliance on these forward-looking statements. 

Specifically, statements of estimated cost savings and synergies related to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. Due to the scale of the Hipgnosis Group, there may be additional changes to the Hipgnosis Group's operations. As a result, and given the fact that the changes relate to the future, the resulting cost synergies may be materially greater or less than those estimated.

Other than in accordance with their legal or regulatory obligations, neither Bidco nor Hipgnosis is under any obligation, and Bidco and Hipgnosis expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Dealing and opening position disclosure requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Takeover Code applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on a website

In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement and the documents required to be published under Rule 26 of the Takeover Code will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Hipgnosis' website at https://communications.singercm.com/p/4UWI-EVY/blackstone-recommended-offer-hipgnosis and on Bidco's website at https://www.announcement-documents.com/ by no later than 12 noon (London time) on the Business Day following this announcement.  For the avoidance of doubt, neither the content of this website nor of any website accessible from any hyperlinks set out in this announcement are incorporated by reference or form part of this announcement.

No profit forecasts, estimates or quantified benefits statements

No statement in this announcement is intended as a profit forecast, profit estimate or quantified benefits statement for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for Hipgnosis for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Hipgnosis.

General

Bidco reserves the right to elect to implement the Acquisition by way of an Offer as an alternative to the Scheme, subject to the Panel's consent and (while the A&R Cooperation Agreement is continuing) to the terms of the A&R Cooperation Agreement.  In such event, such Offer would be implemented on substantially the same terms and conditions, other than the Acquisition Price being increased to the price of the Revised Offer, so far as applicable and subject to appropriate amendments, as those which would apply to the Initial Offer, including the Acceptance Condition as set out in the 29 April Announcement of such number of Hipgnosis Shares as shall, when aggregated with Hipgnosis Shares acquired or unconditionally agreed to be acquired (whether pursuant to the Offer or otherwise) by Bidco, represent Hipgnosis Shares carrying not less than 55 per cent. of the voting rights then exercisable at a general meeting of Hipgnosis Shareholders (or such lower percentage as Bidco may decide), provided that Bidco shall hold or have acquired or agreed to acquire (whether pursuant to the Offer or otherwise) directly or indirectly, Hipgnosis Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Hipgnosis.

If the Acquisition is effected by way of an Offer, and such Offer becomes or is declared unconditional and sufficient acceptances are received in respect of such Offer, Bidco intends to exercise its rights to apply the provisions of Part XVIII of the Companies Law so as to acquire compulsorily the remaining Hipgnosis Shares in respect of which the Offer has not been accepted.

Investors should be aware that Bidco may purchase Hipgnosis Shares otherwise than under any Scheme or the Offer, including pursuant to privately negotiated purchases.

Requesting hard copy documents

In accordance with Rule 30.3 of the Takeover Code, Hipgnosis Shareholders and persons with information rights may request a hard copy of this announcement by contacting Hipgnosis' registrars, Computershare Investor Services (Guernsey) Limited, or by calling 0370 707 4040 or from overseas +44 370 707 4040. Calls are charged at the standard geographical rate and will vary by provider. Calls outside the United Kingdom or Guernsey will be charged at the applicable international rate. Lines are open between 8.30 a.m. to 5.30 p.m. (London time), Monday to Friday (except public holidays in the UK and Guernsey). Please note that Computershare Investor Services (Guernsey) Limited cannot provide any financial, legal or tax advice. Calls may be recorded and monitored for security and training purposes. For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. Such persons may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.

Electronic communications

Please be aware that addresses, electronic addresses and certain other information provided by Hipgnosis Shareholders, persons with information rights and other relevant persons for the receipt of communications from Hipgnosis may be provided to Bidco during the offer period as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments.  Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.

Disclaimer

The Scheme will be subject to Guernsey law, the jurisdiction of the Court, and the applicable requirements of the GFSC, the Companies Law, the Takeover Code, the Panel and the London Stock Exchange.