Hipgnosis tables proposal to offer up to £20m to prospective acquisition bidders

investmentweek.co.uk:

'The board believes the investment adviser's call option therefore depresses the potential value of the company by limiting certain possible opportunities for shareholder value creation.'

This is the latest instalment of the ongoing management saga of the trust founded by manager Merck Mercuriadis, after its continuation vote failed to pass in October.

Hipgnosis narrowly avoids share suspension with publication of interim results

The unsuccessful vote forced the board to propose a reconstruction, reorganisation or wind-up of the trust within six months, since which it has narrowly avoided a share suspension after its interim results were delayed due to increased tensions between the board and investment adviser as to the valuation of the trust's assets.

In the wake of the continuation vote failing, the board underwent a series of changes, and the reformed management team announced it was focused on conducting a «strategic review» of the trust.

In today's (18 January) regulatory filing, it noted it has engaged with shareholders constituting greater than 60% of issued shares, with the investment adviser's 'call option' emerging as one of the key issues, an agreement that gives the investment adviser the right to purchase the portfolio upon termination of the Investment Advisory Agreement.

Hipgnosis results delay sheds light on frictions between manager and revamped board

According to SONG, shareholders have expressed concern about the call option, which they said «constitutes a material conflict of interest for the investment adviser and acts as a significant deterrent to any third-party potential offerors who might seek to acquire the company or its assets».

«The board believes that the investment adviser's call option