Hipgnosis rejects board's request to scrap 'material conflict of interest' call option
The call option has been at the centre of recent arguments, with the board offering a special resolution to try and temper the 'material conflict of interest' that acts as a 'significant deterrent' to potential offerors.
According to a regulatory filing, the board requested its investment adviser, which is majority owned by funds managed or advised by Blackstone, to «unconditionally remove» the call option from its agreement, which was refused.
The call option has been at the centre of recent arguments, with the board offering a special resolution to try and temper the «material conflict of interest» that acts as a «significant deterrent» to potential offerors.
Hipgnosis tables proposal to offer up to £20m to prospective acquisition bidders
The clause within the investment advisory agreement gives Hipgnosis Songs Management the right to purchase the portfolio upon termination of the agreement, which the board argues depresses the potential value of the company by limiting opportunities for shareholder value creation.
Earlier this month, Robert Naylor, who was appointed SONG chair in November 2023, described the call option as «a structural conflict between the interests of our shareholders and the investment adviser, but also creates a significant deterrent to potential bidders for the company's assets thereby depressing the value of the company».
The board has proposed an up to £20m fee to be paid to any prospective bidders who approach it seeking to make an acquisition of the company's assets on recommendable terms, which will be put to shareholders in an EGM to be held 7 February.
Additionally, SONG's board has launched an investigation into whether the agreed $465m of 29 catalogues from SONG to the private
Read more on investmentweek.co.uk
