Largest U.K. stock broker accepts GBP5.4 billion bid from private equity consortium including CVC

By Louis Goss

Hargreaves Lansdown on Friday said it had accepted a GBP5.4 billion ($6.9 billion) takeover offer put forward by a consortium of private equity firms that is set to see the U.K.'s largest stockbroker pulled off the London Stock Exchange.

If approved by shareholders, the deal will see a consortium of private equity firms called Harp Bidco, made up of CVC Capital Partners, Nordic Capital, and Platinum Ivy - a wholly-owned subsidiary of Abu Dhabi's sovereign wealth fund - fully acquire the investment platform.

Hargreaves Lansdown called on shareholders to back plans that would see them paid GBP11.40 per share in what marks a 51.7% premium on the company's closing share price just before negotiations first started in April.

This would see the consortium of private equity firms pay shareholders in the Bristol, U.K. headquartered company 1,100 pence per share in cash and another 30 pence per share special dividend to be paid by November at the latest.

Shares in Hargreaves Lansdown (UK:HL) (HRGLF) increased 2% on Friday having gained 54% in the year-to-date on the back of the private equity firms' takeover offer.

The investment platform's stock price had previously fallen to years' long lows in February as a result of concerns about outflows within the context of the increasingly uncertain economic environment.

Hargreaves Lansdown was started by British entrepreneurs Peter Hargreaves and Steve Lansdown in Bristol in 1981 before becoming the U.K.'s largest retail stockbroker and later floating on the London Stock Exchange in 2007.

Peter Hargreaves has remained Hargreaves Lansdown's largest shareholder in retaining a 19.8% stake in the investment platform, meaning he will receive a more than GBP1 billion windfall from the takeover deal.

Steve Lansdown currently owns an additional 5.7% stake in the investment platform, making him Hargreaves Lansdown third largest investor and putting him in line for a payout worth more than nearly GBP270 million.

If approved by shareholders, the deal will see Hargreaves Lansdown become the latest of a string of companies to be pulled off London's stock exchange.

Low valuations on the U.K.'s main market have driven a flurry of deals that have seen private equity and U.S. listed companies pick up British business at bargain prices in a situation that has left the London Stock Exchange increasingly depleted.

The situation has been worsened by a raft of top companies delisting from the London Stock Exchange - including Tui and Superdry - and a lack of initial public offerings.

-Louis Goss

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08-09-24 0556ET

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