Asset Value Investors urges Hipgnosis shareholders to vote against continuation
This morning, Hipgnosis Songs fund announced it would withdraw its proposed interim dividend.
Ahead of the upcoming AGM and EGM scheduled for 26 October, in which shareholders are set to vote on the future of the trust and the proposed asset sale, AVI executive director Tom Treanor has asked shareholders to vote against both resolutions.
«Over the course of the last several weeks, we have spoken with a majority of the share register. Not one of those shareholders is in favour of an immediate sale of the portfolio, yet we believe many will vote against continuation,» he wrote in a letter to investors.
«We urge undecided shareholders not to be swayed by a misleading narrative that a failure to pass the continuation resolution results in a wind up of the company or a fire sale of assets.»
Instead, the eventual outcome, Treanor said, could be continuing with the same manager under different terms, continuing with a new manager and/or exploring an asset sale at a time of shareholders' choosing.
Hipgnosis Songs music catalogue sale comes under scrutiny as continuation vote looms
Treanor argued that SONG has a «bright future», which he said may be with the current manager on revised terms should a new board decide so following consultation with shareholders. However, he said AVI strongly believes that a reset is «urgently required».
Given SONG's discount to NAV currently exceeds 50%, he argued it is «imperative» the focus is placed on addressing «all impediments» to the shares trading closer to fair value.
«Voting against continuation would provide a newly reconstituted board with a blank canvas to take on this task,» he said. «We understand the manager has recently bolstered its team with new hires including a new CFO and
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