Jefferies: Potential Hipgnosis Songs bidders may be dissuaded by number of impediments

Manager’s termination option rights

Potential bidders for Round Hill Music Royalty fund’s closest peer, the £2.4bn Hipgnosis Songs fund (SONG), could be dissuaded from making a takeover offer by a number of impediments, Jefferies analysts have argued.

On Friday (8 September), the board of the Round Hill Music Royalty fund (RHM) agreed to a $468.8m takeover offer by Concord, representing a discount of 11.5% to NAV and a 67% premium to the $0.69 closing share price on 7 September. As shareholders and analysts digested the news, attention drifted to the Hipgnosis Songs fund, which is trading at a similar discount and will hold its five-year continuation vote at the end of this month. In a research note on Sunday (10 September), Jefferies analysts Matthew Hose and Fiona Huang said the "inevitable question" is whether SONG could also be...