Hargreaves Lansdown agrees £5.44bn takeover | Business News

Leading FTSE 100 investment firm Hargreaves Lansdown (HL) has initially agreed a takeover offer worth £5.44 billion.

Under the terms of the 1,140p per share offer, investors in the Based in Bristol the company will receive 1,110 cents per share in cash, plus a dividend of 30 cents per share.

The group of bidders includes buyout giant CVC, alongside Nordic Capital, and Platinum Ivy, a wholly owned subsidiary of wealth fund Abu Dhabi Investment Authority (ADIA). The consortium is divided equally between the three companies.

It arises following long conversations that had to be prolonged, as Sky News revealed earlier this summer after Hargreaves directors rejected an initial deal of 985 cents a share.

Shareholders must approve the deal before it goes through.

In a stock market update, the consortium said the acquisition will likely be completed in the first quarter of 2025, pending approval.

Hargreaves Lansdown chairman Alison Platt described the deal as a “compelling opportunity for HL shareholders to obtain immediate and certain cash value for their investment at a level that may not be achievable until strategy execution is delivered in medium and long term”. .

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The company, founded in 1981, is the UK’s largest DIY investment platform and has around 1.9 million customers.

It has been a publicly traded company since 2007, but the deal would make it the last great player to delist from the London Stock Exchange.

HL shares rose more than 2% during Friday trading following the announcement.

Representatives from the bidding team described the company as a “strong and trusted brand” in a joint statement.

They added: “As a consortium, we are aligned with management that, despite these strengths, the company now requires substantial investment in an extensive technology-led transformation to improve HL’s proposition and resilience, and to drive the next phase of the growth and development of HL. .”

“The consortium brings extensive experience in supporting businesses in transformation, and its members have a long track record of investing in regulated financial services companies to build better businesses and create better customer experiences.”

This came as HL released its results for the year ending June 30, including underlying pre-tax profit of £456 million, a 4% increase on the previous period.

Vivek Raja, an analyst at Shore Capital Markets, said the deal is expected to be approved by shareholders.

He added: “We do not feel that there is sufficient shareholder resistance to the proposal and the indicative offer… is, in our view, a great price for the buyer.”