Backed with finance from Apollo Global Management in New York, Concord agreed to pay 4.3pc more than the value of Hipgnosis’ assets, which include songs from Blondie, Kaiser Chiefs and Red Hot Chilli Peppers.

This small premium follows the fund’s valuation being slashed by 26pc last month after a devastating report by Shot Tower Capital. The valuer questioned the competence of fund manager Hipgnosis Song Management (HSM) and concluded its founder Merck Mercuriadis had overpaid for its 146 song catalogues in a £1.3bn acquisition spree.

Concord’s coup stunned Blackstone, the US alternative assets group that is the majority investor in HSM. It, along with other potential bidders including music label BMG, had been discussing an offer with the board. 

Last weekend it rushed out a statement saying it was prepared to pay 7pc more in cash than Concord at $1.24 (£1) per share, valuing the company at $1.5bn (£1.2bn). It is expected to formalise the counterbid next week which Hipgnosis has said it would be “minded” to recommend to shareholders.

All this is great news for investors who had seen shares we first tipped five years ago sink on concerns over the company’s debts, the scrapping of the dividend, and worsening relations between HSM and the board. The shares have risen 58pc since 6 March when we advised investors to hold on after the valuation write-down.

Shareholders can thank the fund’s recently appointed chairman Robert Naylor for the revival. Naylor was appointed last November having obtained a 65pc gain for shareholders in Round Hill Music Royalty fund, where he was also chairman, selling the company to Concord for $470m. 

Naylor has cleverly repeated the trick. One source said he had contacted Concord again about replacing HSM as fund manager, but talks had quickly moved to Concord making a bid instead. Concord initially offered $1 a share but had to improve its bid by 16pc.