Incentive fee for Hipgnosis bidders seen as 'marginal positive' for shareholder value

Potential cost for shareholders

Valeria Martinez
clock • 3 min read

The proposed incentive for prospective Hipgnosis Songs bidders is unlikely to deter the investment adviser from exercising its 'call option', but analysts have concurred with the board's view that it could enhance shareholder value in the event of a portfolio sale.

In a regulatory notice today (18 January), the refreshed board proposed a special resolution which, if passed, would offer a fee of up to £20m to prospective bidders for the whole or part of the portfolio on terms "recommendable" by the board, aiming to offset due diligence and acquisition costs. As part of a strategic review that followed the failed continuation vote in October, the board said it had engaged with shareholders holding over 60% of the shares, with one of the key themes emerging from the discussions being concern around the investment adviser's ‘call option'.  On termin...

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