(Reuters) -Shares of Hipgnosis Songs Fund climbed on Thursday after Apollo-backed Concord outbid a proposal by private equity giant Blackstone (NYSE:BX), launching a bidding war for the owner of music rights of artists, including Shakira and Blondie.
Concord, a Nashville-based independent music company, sweetened its bid late on Wednesday for Hipgnosis to $1.25 per share, or about $1.51 billion, slightly higher than Blackstone's proposal of $1.24 apiece.
Shares of Hipgnosis were up 1.1% at 1.028 pounds ($1.28) as the fresh offer fuelled prospects of a higher counter-bid from the world's largest private equity firm.
Concord had last week agreed to buy the music rights investment fund at $1.16 apiece, before Blackstone outbid it over the weekend.
Blackstone said on Thursday it was considering its options and asked shareholders not to take any action on Concord's new bid.
While Concord's offer is a formal one and has been backed by the Hipgnosis board, Blackstone has yet to table a firm bid or announce its intention to make a formal offer as per takeover rules in the UK.
Blackstone is a majority shareholder in Hipgnosis' investment adviser, HSM, which manages artists and songwriters for the fund and holds a call option to make a higher offer for Hipgnosis' portfolio if their advisory agreement were to be terminated.
The Blackstone proposal is independent of HSM.
Hipgnosis, founded by industry veteran and ex-CEO Merck Mercuriadis in 2018, started a strategic review last year after a shareholder vote against the continuation of the fund led to a tumultuous period and a dispute with HSM over the call option.
Concord said Hipgnosis' third-biggest shareholder CCLA Investment Management has agreed to sell its stake of about 4.8% to Concord at $1.25 per share by May 8.
Concord will have the backing of shareholders representing about 20.7% of Hipgnosis shares after the stake sale.
($1 = 0.8004 pounds)