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(Alliance News) - Hipgnosis Songs Fund Ltd on Thursday confirmed the valuation of its portfolio was in line with an earlier estimate, giving its shares a boost.
The music investment and song management company turned to independent advisor Shot Tower Capital LLC to determine the fair market value of the company's portfolio. Shot Tower gave a preliminary value between USD1.80 billion and USD2.06 billion.
A final valuation, announced Thursday, of USD1.95 billion was given, so in line with the previous findings.
Looking ahead, the board plans to announce the conclusion of the strategic review by April 26, along with proposals for the future of the company.
Hipgnosis shares were up 8.0% to 68.82 pence each in London, as Thursday's announcement offered it some share price relief after a difficult past few months. Shares are down 15% over the past 12 months.
Last year, the embattled investor in music rights said an independent valuer, Citrin Cooperman, found its assets had a value "materially higher than the valuation implied by proposed and recent transactions in the sector".
Last week Monday, the company reported an "identification of an error" of its net asset value calculation, meanwhile, caused by "double counting" of accrued revenue. This caused the pro-forma operative NAV to be reduced to 107.65 cents or 85.03p per share. Earlier in March, it said its operative NAV at September 30 was 173.92 US cents, or 142.49 pence.
Also earlier this month, it said it will divert its free cashflow toward paying down debt and won't resume paying dividends "for the foreseeable future".
Hipgnosis Songs is also locked in a dispute with founder Merck Mercuriadis.
The dispute was sparked by an arrangement, later rejected by Hipgnosis Songs Fund shareholders, to sell part of the fund's portfolio to a joint-venture between Hipgnosis Songs Management and private equity firm Blackstone Inc. Mercuriadis last month stepped down as chief executive of Hipgnosis Songs Management, and the board of Hipgnosis Songs Fund also changed. The two sides currently are squaring off in UK High Court.
By Elijah Dale, Alliance News reporter
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