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What’s Next for Hipgnosis? A ‘Roller Coaster’ of Missteps Brings the Fund and Its Founder to a Crossroads
What's next for Hipgnosis and founder Merck Mercuriadis as Concord and Blackstone vie to acquire the embattled song fund?
Regardless of the buyer, an acquisition would mark an end to the 5-year-old London Stock Exchange-listed company and give shareholders an offramp after HSF faced questions about its operational acuity and, most recently, alleged evidence of accounting missteps that overstated both revenue and its portfolio’s valuation. Once a freewheeling darling of the music business that acquired rights to music by Red Hot Chili Peppers, Neil Young and Shakira, the company suffered from a struggling share price, the cancellation of the dividend and — the coup de grace — an unflattering due diligence report by investment bank Shot Tower Capital released March 28 that found the company’s investment adviser, the Merck Mercuriadis-led HSM, committed a series of missteps. Investment managers, some of whom spoke on the condition of anonymity because they did not want to comment publicly before the next board meeting, said that the report’s findings presented extraordinary examples of gross incompetence and “myriad” accounting issues.
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