Shareholders Reject Hipgnosis Songs Fund's $440 Million Divestment Plan, Future of Company in Question

Investors unhappy with management and price drop prompt unanimous vote for major structural changes and abandonment of the catalogues sale, leaving Hipgnosis six months to present future option proposals.

• Hipgnosis shareholders have unanimously rejected a $440 million catalogue divestment plan, calling for major structural changes and an alternative to the company's present state.
• Once a trendsetter for high-dollar deals for artists' song catalogs, Hipgnosis has recently faced criticism for a significant share price drop. The shares have fallen by over 40% since late 2021.
• The company, which had gained investor attraction by pitching music rights as a special kind of financial asset, shocked shareholders by suspending its quarterly dividend due to an industry-wide royalty rate adjustment in the U.S.
• Hipgnosis's tentative proposal to sell 29 catalogs to a Blackstone-backed fund to pay off debts and buy back shares was also declined by its investors as the price was considered too low.
• The company’s board now has six months to introduce proposals for future plans, which may involve restructuring the company, instituting a liquidation of all or part of the company’s existing portfolio, or even winding up the company altogether. The shareholders have also decided against maintaining the company's structure as an investment trust.

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