Hipgnosis board launches strategic review as continuation vote approaches
The board had asked its current investment adviser to remove the call option entitling it to acquire the trust’s portfolio on termination, but it had declined.
In a stock exchange notice today (19 October), the Hipgnosis' board said it would be considering «all options» for the future of the trust, including a review of the future management arrangements of the trust, with the aim of maximising value for shareholders.
However, it stressed that it was not envisioning any takeover or merger offers as part of the review.
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The board added it had initially considered terminating its investment advisory agreement, but concluded it was not in shareholders' interest to do so, as this would lead to a default on its revolving credit facility without a new investment adviser.
This is due to a one-time termination fee equal to one year's advisory fee calculated on NAV if the agreement is cancelled without cause, it said.
The board had asked its current investment adviser, Hipgnosis Song Management, to remove the call option entitling it to acquire the trust's portfolio on termination, but it had declined, it explained.
The decision to initiate a review came following «extensive engagement» with shareholders over the upcoming votes on 26 October to decide whether to sell a fifth of its music catalogue and on the continuation of the trust, the board said.
«These meetings highlighted a continued belief in the company's portfolio and growth prospects of the asset class as well as the need for changes by the company in order to deliver value for shareholders,» it said.
Following the news of the strategic review, the board will now be undertaking a further round of
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