The board of Hargreaves Lansdown, the UK’s largest investment platform, has said it is willing to “unanimously recommend” a £5.4bn takeover offer from a consortium of private equity firms led by CVC Capital Partners, according to a report by the Financial Times.
In a press statement, Hargreaves Lansdown confirmed it has requested an extension for the private equity firms to formalise their offer beyond the original deadline set for Wednesday, in accordance with UK takeover regulations. The company emphasised that the new bid is one the board is prepared to endorse to its shareholders.
This offer values the company at £11.40 per share and is 15% higher than the 985p per share offer made in April, which was dismissed by Hargreaves Lansdown’s board as significantly undervaluing the company.
According to Citi, a successful deal would allow shareholders to stay invested in the unlisted vehicle, potentially enabling the founders, who collectively own 26% of the company, to retain their stakes.
The consortium, which includes Nordic Capital and Platinum Ivy (a subsidiary of the Abu Dhabi Investment Authority), has until 19 July to finalise their bid and outline their plans for Hargreaves Lansdown.
Co-founder and largest shareholder Peter Hargreaves told the FT that it was “a disgrace” and described his namesake as “one of the best-run companies in the UK 10 years ago”. Co-founder Stephen Lansdown, who holds a 6% stake, meanwhile said separately that price was “not the main consideration”, instead emphasising the private equity firms’ plans for the business.
The takeover offer comes as Hargreaves Lansdown faces a slowdown in customer inflows, coupled with rising costs under previous management — last year, the company appointed Alison Platt as chair and Dan Olley as chief executive, replacing Deanna Oppenheimer and Chris Hill respectively. Its shares have plummeted from a high of £24 in 2019 to a low of £7 earlier this year.
Hargreaves Lansdown is based in Bristol and manages £150bn in customer assets.
