Hargreaves Lansdown agrees £5.4bn private equity takeover

Hargreaves Lansdown has agreed to a takeover offer worth £5.44bn from a consortium including buyout giant CVC Capital Partners and the Abu Dhabi wealth fund.

Under the terms of the 1,140p-per-share offer, investors in the Bristol-based investment platform will get 1,110p per share in cash plus a dividend of 30p per share as part of the deal.

The group of bidders includes buyout giant CVC, Nordic Capital, and Platinum Ivy, a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA). The consortium is owned in equal parts by the three firms.

In a stock market update, the consortium said the deal is set to complete in the first quarter of 2025 if shareholders approve the terms.

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

Talks between Hargreaves Lansdown and the consortium have gone on for months over a potential takeover, after Hargreaves directors rejected an initial 985p per share deal.

However, the latest update indicates that bosses are willing to go with the revised 1,140p-per-share bid submitted in June.

Alison Platt, the chairperson of Hargreaves Lansdown, said the offer was 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”.

Founded in 1981, Hargreaves Lansdown is the UK’s biggest DIY investment platform with about 1.9 million customers.

It has been a publicly traded company since 2007, but the deal would make it the latest big firm to leave the London Stock Exchange , after a swathe of take-private deals and companies opting to relist on other indices, including in the US.

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, also called Hargreaves a “strong, 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 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.”

Hargreaves Lansdown also released its results for the year to April on Friday, reporting that it had reached a record £155.3bn assets on site.

That came after a wave of new customers and investors in the final months of the tax year.

It brought in 24,000 new customers over the period, an increase of 13,000 from the same time a year before.

Vivek Raja, an analyst at Shore Capital Markets, said: “We expect the deal to go through as: (i) HL’s board has recommended it, (ii) we don’t get the sense that there is sufficient shareholder resistance to the proposal, and (iii) the indicative offer for the business of 1140p per share including 30p of final dividend per share is in our view a great price for the buyer.”