Capital Economy, Business and Finance
Blackstone is poised to win the bidding war for the Hipgnosis Songs Fund after offering $1.6 billion. Hipgnosis, which controls 138 catalogues including songs by the Red Hot Chili Peppers and Shakira, was put up for sale as high interest rates and devaluations of its portfolio battered its balance sheet. Blackstone’s offer is a $100 million improvement on a rival asset manager’s and almost 50 per cent above Hipgnosis’ pre-takeover valuation. Blackstone is clearly willing to pay above market rate in an effort to corner a significant slice of the music industry – it has stumped up another billion dollars to acquire new catalogues through a subsidiary. But regardless of scale, it’s unclear how asset managers will be able to turn royalties into dividends.