Hargreaves Lansdown backs £5.4bn private equity bid

Hargreaves Lansdown (HL.) took the next step towards agreeing to a takeover after a private equity consortium comprising CVC, Nordic Capital and Abu Dhabi-backed Platinum Ivy returned with a possible 1,140p a share offer, valuing the company at approximately £5.4bn. The improved bid, though not technically yet a formal offer, comes after HL’s board rejected a £4.7bn approach from the private equity group in May – one of three previous approaches. Hargreaves Lansdown's share price climbed 5 per cent to 1,127p in response to the announcement. 

“The board has confirmed to the consortium that the revised possible cash offer is at a value that the board would be willing to recommend unanimously to Hargreaves Lansdown shareholders," the company said. HL has asked the takeover panel to extend the deadline by which the consortium must confirm their intention to make an offer to 19 July. The structure could land some existing shareholders with stakes in a private acquisition vehicle. 

Rahim Karim, an analyst at broker Investec, said shareholders had pushed for this change in the offer. “In what would appear to be a response to the demands of some of the group’s largest shareholders, the offer includes the option to elect for a rollover alternative in respect for some, or all, of their HL shares.” However, the analyst also commented that while the consortium could justify a price between 1,118p and 1,398p, so far the offer only encourages the board to engage with the consortium, “but equally we do not see this offer as knock out in nature”.  

Hargreaves Lansdown said a buyout would "provide the certainty of value in cash to shareholders". 

The platform's co-founder and 6-per-cent shareholder Stephen Lansdown told the Financial Times last week said he would want to "know what [the consortium's] plan is for looking after clients" before backing any offer. Hargreaves Lansdown is the UK's top investment platform, with a client base of 1.8mn people.