Reservoir Stock Surges Amid $1.2B Unsolicited Mega Bid

Photo Credit: Joni Mitchell by Shawn Miller for the Library of Congress (Public Domain)

As soon as Irenic Capital Management made an unsolicited monster $1.2 billion bid for Reservoir Media, the publisher’s stock surged by nearly 20%.

Rumors swirled for over a week that activist hedge fund Irenic Capital Management was eyeing Reservoir Media, an independent music publisher with a storied catalog featuring the likes of Joni Mitchell and John Denver. Now, sources close to the matter have revealed that Irenic, as one of Reservoir’s largest shareholders, had submitted a bid for the company worth approximately $1.1 billion to $1.2 billion, or $10 to $11 per share.

No sooner had the news dropped than Reservoir’s shares soared by 12% in New York trading on Thursday morning, raising its market value to an impressive $554 million. By Thursday evening, it was up by 18%. Reservoir went public in 2021; Irenic owns a stake of about 9%, according to Bloomberg.

Update: Reservoir recently told Digital Music News that Irenic had no influence on Reservoir’s decision to go public, as originally reported.

Founded in 2007, Reservoir proudly describes itself as the first female-founded and first U.S.-based publicly traded independent music company. Its portfolio includes around 150,000 copyrights and 36,000 master recordings.

Irenic, headed by Adam Katz of Elliott Investment Management fame and Andy Dodge of Indaba Capital Management, successfully pushed for sales at companies such as FD Technologies, Barnes Group, Couchbase, and Triumph Group.

Investors have been champing at the bit to invest more money into music publishing in the last few years, based on the reasoning that catalogs of predictable cash flow amid the streaming boom spearheaded by the likes of Spotify and YouTube.

In January, Sony Music Group and the Singapore sovereign wealth fund GIC Pte formed a joint venture to acquire music copyrights with around $2 billion to $3 billion to play with. Other major investors in the trend have included Blackstone, KKR & Co., and Apollo Global Management.

News of the reported Reservoir deal comes amid that of activist investor Independent Franchise Partners (IFP) purchasing a 3% stake in Universal Music Group. The firm also holds an approximate 9% interest in Warner Music Group.