Alchemy Copyrights to buy Round Hill Music for $468.8m

Round Hill Music Royalty Fund shares surged on Friday after it agreed to be bought by Alchemy Copyrights for around $468.8m.

Under the terms of the deal, Round Hill shareholders will get $1.15 in cash per each scheme share, which is a premium of 67.3% to the closing share price on Thursday.

Since its IPO in November 2020, Round Hill has invested in a portfolio of music rights comprising 51 catalogues, representing a collection of over 150,000 songs. The portfolio of catalogues includes songs by artists such as Alice In Chains, Bonnie Tyler, British Rock band Bush, Bruno Mars, Céline Dion, Lady A, Louis Armstrong, The Offspring, country music star Carrie Underwood, The Supremes, Wilson Pickett and Whitesnake.

Alchemy, which trades as Concord, has been an active acquirer of music rights and companies for more than a decade. Since 2015, it has deployed more than $2bn of capital and completed more than 100 transactions across recorded music, music publishing and theatricals.

"Concord continues to be active in the market, looking at many potential transactions that meet its investment criteria," it said.

"Concord and its management have followed the progression of RHM since IPO and believe that RHM's assets complement Concord's long-standing objective to acquire high quality and long-term music assets. Concord believes that the quality of RHM's assets are consistent with Concord's existing holdings, and creators connected to the rights acquired will benefit from the services of Concord's existing creative and administrative support teams globally."

At 1005 BST, Round Hill shares were up 65% at $1.13.

Russ Mould, investment director at AJ Bell, said: "Round Hill Music Royalty Fund floated on the stock market close to the peak of the hype in music investments. Its share price traded sideways for a year and a half, and then went into freefall as interest rates shot up.

"It has now received a takeover offer at a hefty premium to last night’s closing market price. Shareholders have the opportunity to get out at a price higher than the shares have ever traded since listing. That is a relief to them, but hardly chimes with the expectations for the company at the time of its listing in 2020.

"The more high-profile music royalty vehicle on the London Stock Exchange is Hipgnosis Songs Fund. Its shares jumped 13% following the Round Hill news as investors suddenly perked up, wondering if it too will be rescued out of the doldrums with a bid."