LONDON (CelebrityAccess) — Hipgnosis Songs Fund’s newly formed Board shared an update following a strategic review of its assets by Shot Tower Capital.
The independent valuation, which was launched last year after Hipgnosis and their investment advisor Hipgnosis Song Management Limited were unable to reach an agreement on the fair market value of key assets.
Shot Tower Capital, which the board brought in to conduct the review, provided a preliminary valuation of Hipgnosis’ portfolio between $1.80 billion and $2.06 billion and $1.74 billion and $2.00 billion after deducting contingent catalogue bonuses of $59.9 million.
The Shot Tower Valuation compares to Fair Value as at 30 September 2023 of $2.62 billion, and $2.55 billion after deducting the catalogue bonus provision of $68.1 million.
Additionally, Shot Tower’s preliminary determination found that Hipgnosis cash net revenue after reduction for third party royalties and administration expenses was $121.7 million for the 12-month royalty statement period ended 30 June 2023, which is consistent with the $119.4 million cash net revenue figure for the 12-month period ended 30 September 2023, derived by BDO as part of its quality of earnings analysis.
Hipgnosis board indicated that it plans to use free cashflow to reduce debt, halting dividend payments for the foreseeable future. Shot Tower Capital expects to present final findings by March 25th, with the Board promising a comprehensive update by March 29th.
“The newly constituted Board is making good progress with the due diligence work that will underpin its strategic review,” stated Robert Naylor, Chairman of Hipgnosis Songs Fund. “We are disclosing the valuation at this time given its material difference to valuations previously disclosed. The Board will provide further detail on this when the due diligence is complete. The Board remains focused on identifying all options to deliver shareholder value.”
