Hipgnosis says it can issue shares for specific investment

Hipgnosis Songs Fund has reminded investors it is authorised to issue shares to finance a specific investment as it vies with other companies to snap up song catalogues of famous artists.

The music rights investor said if it issued shares under the authority granted by shareholders it would sell them at 118.49p each based on its latest operative net asset value (NAV) and the cost of issuance.

Hipgnosis said the operative NAV did not reflect an independent valuation of its assets at 31 March. The audited NAV per share will be reported in June, it said.

The company, founded by former Elton John and Guns 'n' Roses manager Merck Mercuriadis, has been buying up songs by artists such as the Pretenders, Fleetwood Mac and Mark Ronson to capitalise on the streaming revolution. But Mercuriadis faces stiff opposition in a hot market after Bob Dylan sold his catalogue to Universal Music for more than $300m.

Hipgnosis raised £75m in February to fund further acquisitions of song rights. At the same time shareholders allowed the company to issue up to 1.5 billion shares without offering the shares to existing investors.

"The company may choose to use a limited amount of this share issuance authority, through JP Morgan Securities PLC, to fund a specific investment opportunity in accordance with its investment policy," Hipgnosis said on Thursday. It added there was no certainty it would issue shares under the authority.

Hipgnosis shares fell 1.1% to 123p at 15:02 BST.