Hargreaves Lansdown accepts £5.4bn consortium bid

After several delays, platform and major SIPP provider Hargreaves Lansdown (HL) has today accepted a £5.4bn private-equity backed consortium offer for the company. The consortium, let by CVC advisers and back by Abu Dhabi’s Investment Authority and others, will pay 1140p per share. Bristol-based HL is one of the UK’s biggest direct to consumer investment platforms with £150bn in assets under administration and 1.858m active clients (April 2024 figures). The cash offer was originally made on 18 June but was pushed back three times until it was accepted today. The full price being paid for HL's entire issued shares is approximately £5.443bn. Bristol-based Hargreaves Lansdown, set up by entrepreneurs Peter Hargreaves and Stephen Lansdown, will be acquired by Harp Bidco Limited. Harp Bidco is a new company which is indirectly owned by CVC Private Equity Funds, Nordic Capital XI Delta, SCSp (acting through its general partner, Nordic Capital XI Delta GP SARL) and Platinum Ivy B 2018 RSC Limited). Initial offers by the consortium were indicative and Hargreaves Lansdown asked to see a firm offer made which has been accepted today. Hargreaves Lansdown had earlier rejected a £5bn takeover bid from the private equity consortium in May. Hargreaves has seen changes to its senior management team in recent times and faced criticism for its poor share price performance. Alison Platt replaced Deanna Oppenheimer as chair of the board in February after Ms Oppenheimer unexpectedly quit in November after activist investors threatened to vote against her re-appointment at the December AGM. Some investors were unhappy with the firm’s share price performance, including one of HL's founders, Peter Hargreaves. Deanna Oppenheimer served as chair for six years during which time the share price fell from a peak of 2,419p in May 2019 to 706p by the time she quit. Since bid speculation emerged, the company’s share price has risen considerably. In early trading today the share price was up 2.3% to 1101p and for the year to date is up 388p or 54%. The takeover will be subject to shareholder and regulatory approval. Hargreaves Lansdown also published its annual results today for the year ended 30 June. It reported net new business of £4.2 billion and Assets Under Administration up 16% to £155.3 billion driven by net new business and positive market movement. It said it had a total of 1,882,000 active clients, an increase of 78,000 in the year however pre-tax profit fell 2% to £396.3 million. The Total Ordinary dividend was up 4.0% at 43.2 pence per share. > Financial Planning Today Snap Analysis: After initially being unreceptive to a takeover bid, HL's board has come round to the idea and the share price, up 54% this year, has reflected wider support for the idea of new ownership and a change of direction. HL has, to some extent, been an unhappy ship for some time. Unhappiness from one of the founders, Peter Hargreaves, and the sudden exit of the previous chair amid a falling share price did nothing to restore confidence. Pre-tax profits dipping slightly today also underline a view that HL, given its nearly 2m clients, should be performing much better. A new direction should do much to get the HL's engine firing on all cylinders. And there is much to be positive about. HL has rapidly grown client numbers in recent years and has been at the forefront of app development and expanding online services. It also has a sizeable Financial Planning arm for its direct clients who want a little more help. Of course, competition from the likes of AJ Bell, Interactive Investors and others has grown so it will need to be on its mettle but the new owners have deep pockets and will want to invest in the firm to restore its fortunes and see profits growing considerably. Rivals should be a little concerned and some may be reviewing their own ownership and funding.

Hargreaves Lansdown accepts £5.4bn consortium bid

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