Hargreaves Lansdown agrees to $6.9 billion takeover by CVC consortium

London – UK investment platform Hargreaves Lansdown The company said on Friday it had agreed a 5.4 billion pound ($6.9 billion) takeover offer from a group of investors including CVC Group.

Abu Dhabi’s sovereign wealth fund and private equity investor Nordic Capital is also part of the consortium, which said the offer was final.

As a result of the deal, shareholders of Hargreaves Lansdown, Britain’s largest stockbroker, will receive earnings of 1,110 pence per share and a dividend of 30 pence per share, the company said.

Its shares were up about 2.2% in early trading.

The move comes after the company rejected a £4.7bn (985p per share) takeover bid from a consortium in May, which Hargreaves Lansdown said at the time “significantly” undervalued the company and its prospects.

Friday’s cash offer represents a 54% premium to the shares’ closing price of 740 pence on April 11, the day before the group first made its takeover bid for the company.

Hargreaves Lansdown’s share price surged after the takeover bid was made in May following a difficult few years, as the company weathered regulatory changes, new market entrants and expectations of falling interest rates.

In September 2023, the investment platform – whose rivals include Interactive Investor and AJ Bell – outlined a new strategy that included a renewed focus on customers, accelerated innovation and implementation of savings measures.

On Friday, Hargreaves Lansdown reported earnings for the year to the end of June, with underlying pre-tax profits up 4% to £456m, and revenue also up 4% to £764.9m. However, net new business inflows fell 13% to £4.2bn.

Analysts at Jefferies called the result slightly above expectations and said they expect the takeover bid to go through.

Analysts led by Julian Roberts said: “The board recommends that the consortium make an offer of 1,110p per share, plus a 30p dividend, which would also be supported by the two largest shareholders, the founders.”

“While the offer represents a 54% premium to the pre-acquisition share price, we believe HL is better valued in the medium term. Nevertheless, we expect the acquisition to be successful.”

Hargreaves Landsdown chairwoman Alison Platt said in a statement on Friday that the offer was “an extremely attractive opportunity for HL shareholders”.

Meanwhile, representatives from CVC Private Equity Group, Nordic Capital Advisors and Abu Dhabi Investment Authority said Hargreaves Landsdown “requires significant investment and an extensive technology-led transformation to enhance HL’s proposition and resilience and drive HL’s next phase of growth and development.”

They added: “We look forward to working with HL management to accelerate its transformation plan – including investments in technology infrastructure, digital channels and service enhancements – all with customer value, service, speed of innovation and HL’s clear purpose at its core.”