Music investment firm Hipgnosis agrees $1.4 billion sale to Concord

London-listed Hipgnosis Songs Fund, the music intellectual property investment company founded by Merck Mercuriadis and Nile Rodgers in 2018, announced Thursday its board has recommended a sale to music rights investor Concord — valuing the firm at $1.4 billion.

Shares of the FTSE 250 constituent were 31% higher at 8:30 a.m. U.K. time Thursday.

Hipgnosis snapped up song rights for high-profile artists including the Red Hot Chili Peppers, Beyoncé, Mark Ronson, Shakira, Neil Young and Blondie, but has been mired in financial reporting issues, while its pre-tax operating loss widened in 2023 to $86.63 million.

The valuation is the equivalent of £0.932 ($1.16) per share, a 32.2% premium on Wednesday’s closing price. Financing for the deal will be supported by Concord’s partner Apollo Capital Management, the U.S. private equity giant.

In a release, the companies said Concord had a “proven track record of strategic acquisitions and catalogue expansion” and that the “creators connected to the rights” would benefit from the deal.

It also said that to achieve a “material improvement in the share price,” the company needed “substantial financial and governance changes to improve its financial performance.”