Hargreaves Lansdown (HL) has accepted a £5.4bn deal to be acquired by a consortium of private equity investors.
The investment platform’s board has recommended that shareholders vote in favour of the acquisition, with the deal expected to close in the first quarter of 2025.
The private equity consortium is made up of CVC Advisers Limited, Nordic Capital, and Platinum Ivy, a subsidiary of Abud Dhabi Investment Authority, under the newly-formed bidding company Harp Bidco.
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HL shareholders will receive 1,110p per share if the deal goes through, representing a 54.1% premium to the 740p closing price on 11 April — the day before the consortium’s first approach.
The consortium will need approval from 75% of shareholders.
In the stock exchange announcement, it said co-founders Peter Hargreaves and Stephen Lansdown were intending to vote in favour of the deal, while it has received irrevocable undertakings from 25.5% of shareholders so far.
Meanwhile, shareholders will also be able to elect to exchange their stake for ‘rollover shares’, allowing up to 35% to stay invested following completion.
Alison Platt, chair of HL, said: “While the Independent HL Board has been pleased with the progress made by the new management team, the Independent HL Board believes that the cash offer represents an attractive opportunity for HL Shareholders 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 over the medium to longer term, and therefore intends to unanimously recommend HL Shareholders vote to approve it.”
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Pev Hooper, managing partner at CVC Private Equity Group, Emil Anderson, partner at Nordic Capital Advisors and Hamad Shahwan Aldhaheri, executive director of the private equities department at ADIA said: “Over the 40 years since it was founded, HL has built a strong, trusted brand, underpinned by high levels of customer loyalty and advocacy. 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 HL’s growth and development
“The Consortium brings extensive experience in supporting businesses undergoing transformation, and its members have long records of investing in regulated financial services companies to build better businesses and create better customer experiences.
“We look forward to partnering with HL’s management to accelerate its transformation plan – including investment in technology infrastructure, digital channels, and service enhancement – all with client value, service, speed of innovation, and HL’s clear purpose at the core.”
This story was written by our sister title, Portfolio Adviser
