The logo at the headquarters of Hargreaves Lansdown Plc in Bristol, UK, on Thursday, August 8, 2024.
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LONDON — UK Investment Platform Hargreaves Lansdown said on Friday that it had agreed to a takeover offer worth the equivalent of 5.4 billion pounds ($6.9 billion) from a group of investors including CVC Group.
Abu Dhabi sovereign wealth fund and private equity investor Nordic Capital, which are also part of the consortium, said this was a final offer.
Shareholders of Hargreaves Lansdown – the UK’s largest stockbroker – will receive 1,110 pence per share and a dividend of 30 pence per share under the deal, the company said.
Shares of the company were up about 2.2% in morning trading.
The news comes after the company rejected a takeover offer from the group for £4.7bn, or 985p per share, in May. At the time, Hargreaves Lansdown said the offer “significantly” undervalued the company and its prospects.
Friday’s cash offer represents a 54% premium to the stock’s closing price of 740p on April 11 (the day before the group made its initial bid for the company).
TRIP
Hargreaves Lansdown shares soared following the takeover bid in May after a difficult few years as the company struggled with a range of issues including regulatory changes, new entrants to the market and expectations of falling interest rates.
In September 2023, the investment platform — a competitor to Interactive Investor and AJ Bell — outlined a new strategy that included a renewed focus on customers, accelerating innovation and implementing savings measures.
Hargreaves Lansdown reported earnings for the year to the end of June on Friday, with underlying pre-tax profits up 4% to £456m and revenue also up 4% to £764.9m. However, net new business inflows fell 13% to £4.2bn.
Analysts at Jefferies described the results as slightly better than expected and said they expect the acquisition effort to be successful.
The board has proposed a price of 1,110p per share plus a 30p alliance dividend and would be supported by the two largest shareholders, the founders, said analysts led by Julian Roberts.
“Although the offer price represents a 54% premium to the pre-offer share price, we believe HL will be worth more in the medium term. However, we expect the offer to be successful.”
Hargreaves Landsdown chairman Alison Platt said in a statement on Friday that the takeover offer “represents an attractive opportunity for HL shareholders.”
Meanwhile, representatives from CVC Private Equity Group, Nordic Capital Advisors and Abu Dhabi Investment Authority said Hargreaves Landsdown “needs to invest significantly in a deep technology transformation to improve HL’s proposition and resilience, and drive HL’s next phase of growth and development.”
“We look forward to working with HL’s management to accelerate its transformation plan – including investment in technology infrastructure, digital channels and service enhancements – all with HL’s customer value, service, speed of innovation and clarity of purpose at its core,” they added.
