Hargreaves Lansdown agrees £5.4bn takeover by private equity consortium

Hargreaves Lansdown has finally accepted a £5.4billion takeover proposal from a private equity-backed consortium.

The online investment platform has agreed to be acquired by a group comprising CVC Capital Partners,Nordic Capital and Platinum Ivy,a subsidiary of sovereign wealth fund the Abu Dhabi Investment Authority.

Hargreaves shareholders will receive £11.40 in cash for every share they own,along with a 30 pence per share dividend.

Deal: Hargreaves Lansdown has agreed to be acquired by CVC Capital Partners,a subsidiary of the Abu Dhabi Investment Authority

The offer represents a 54.1 per cent premium to Hargreaves' share price on 11 April,the final day before the consortium first approached the FTSE 100 company's board.

Hargreaves unanimously rejected an initial £4.7billion proposal in May,claiming it 'substantially' undervalued the firm and its future prospects,before the consortium raised its offer by £700million.

Alison Platt,chair of Hargreaves,told investors the new deal 'represents an attractive opportunity' for them to 'realise an immediate and certain cash value for their investment at a level which may not be achievable until the execution of the strategy is delivered'.

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Completion of the acquisition is set to happen in the first quarter of 2025,subject to shareholder approval.

Hargreaves Lansdown shares were 2.3 per cent higher at 1,102p on Friday morning following the announcement,meaning they have grown by around 55 per cent since the year started.

Since being founded by Peter Hargreaves and Stephen Lansdown in 1981,the firm has grown to become the UK's largest direct-to-consumer investment platform.

As of June,its client numbers totalled 1.9 million,while its assets under management equalled £155.3 billion.

The company enjoyed strong growth during the lockdown era when many young Britons tried their hands at retail investing for the first time to earn some extra cash.

However,it started experiencing a significant slowdown in trade as Covid-related restrictions were loosened and the Bank of England hiked interest rates in response to rising inflation.

Combined with concerns about higher costs and technology spending,this has caused its share price to tumble and led to the firm briefly spending time on the FTSE 250 Index.

Hargreaves' potential takeover would mark another blow for the London markets,which have seen multiple major companies sold to foreign buyers in recent years.

In 2024 alone,Robinsons Squash maker Britvic,cybersecurity specialist Darktrace,music rights investors Hipgnosis Songs Fund,and video games services business Keywords Studios have all agreed to billion-pound takeover deals.

Hargreaves also published its annual results on Friday,which showed its pre-tax profits slipped by 4 per cent to £396.3million in the year ending June.

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