Hargreaves Lansdown agrees to $6.9 billion private equity takeover

Aug. 9 (UPI) -- Hargreaves Lansdown announced Friday that it agreed to a $6.9 billion takeover offer from a consortium of private investors including CVC Group, Abu Dhabi 's sovereign wealth fund and Nordic Capital.

Hargreaves Lansdown is Britain's largest stockbroker. The offer is subject to shareholder approval and has been recommended for approval by the HL board.

HL Chair Alison Platt said in a filing with the London Stock Exchange the HL board believes the cash offer "represents an attractive opportunity for HL Shareholders to realize 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."

According to the stock exhange filing, Harp Bidco Limited is a private limited company formed to carry out the acquisition by a private consortium and is indirectly owned in equal shares by CVC Private Equity Funds, Nordic Capital Vehicles, and Platinum Ivy.

Platinum Ivy is a wholly-owned subsidiary of the Government of Abu Dhabi's ADIA fund.

A statement from that consortium said in the stock exchange filing it is aligned with the management of HL but that "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 joint statement from 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 added, "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."

Friday's cash offer is higher than one offered by the consortium in May that was rejected. If accepted by shareholders, the offer will take HL out of the London Stock Exchange.

"Although the offer is a 54% premium to the pre-offer share price, we think there is greater value in HL in the medium term. Nevertheless, we expect the offer to succeed ," Jeffries analyst Julian Roberts said.

The deal will be a huge windfall for HL billionaire founders Peter Hargreaves and Stephen Lansdown. Hargreaves owns nearly 20% of HL shares while Lansdown owns 5.7%.

HL shareholders will have the option of cash payouts or rolling their shares into the private company.

HL has roughly 1.9 million clients and $198.17 billion in assets under management.