Thursday 2 July 2020 12:42 pm

Hipgnosis seeks £200m capital raise in new share placing

Music royalties investment firm Hipgnosis has announced plans to raise £200m in a share placing as the company looks to expand its catalogue portfolio.

The London-listed firm said it hopes to raise the cash in a retail offer of up to 200m new C shares, at a price of 100p per share via London fintech Primarybid. The company, which was added to the FTSE 250 in March, will also conduct a non-preemptive placing of C shares under its existing placing programme.

Read more: Hipgnosis takes majority stake in Mark Ronson’s publishing catalogue

The net proceeds of the placing will be used to fund fresh acquisitions for the music rights group, which has pursued an aggressive acquisition strategy over the past few years.

Earlier this year Hipgnosis, which generates revenue through licensing deals for its catalogue of hit songs, acquired the majority of the publishing catalogue of songwriter Mark Ronson and Bon Jovi lead guitarist and songwriter Richie Sambora.

The group now has a portfolio of 54 artists, after Hipgnosis last year bagged the rights to The Chainsmokers’, Kaiser Chiefs’ and Timbaland’s catalogues. 

It now holds the rights to five of the top 10 songs of the decade as ranked recently by Billboard Magazine, including Shape of You by Ed Sheeran and Justin Bieber’s Despacito. It also includes old classics such as Amy Winehouse’s Back to Black and Bon Jovi’s Livin’ on a Prayer in its portfolio.

Last month, the group announced that its investment adviser was in discussions to secure a pipeline of catalogues with an acquisition value of over £1bn. Today’s share raise will seek additional funding for further investments. 

Hipgnosis founder Merck Mercuriadis said: “Having invested over $1bn in some of the most extraordinarily successful songs of all time in the last 24 months, we are now a FTSE 250 company and the 58th biggest yielder on the index.” 

“This capital raise provides us with the opportunity to continue growing our portfolio of culturally important proven hit songs, which currently offer significant value.”

The share raise comes ahead of the publication of Hipgnosis’ annual results tomorrow, which look to bolster the firm’s strong market position. 

Read more: Hipgnosis signs up songwriter behind Adele and Stormzy hits

Hipgnosis reported better-than-expected revenue of £64.7m in the year to the end of March, while net asset value grew 17.7 per cent.

Shares remained broadly flat at 116.5p on the news at 12.30.

Before the Open: Get the jump on the markets with our early morning newsletter