Hargreaves Lansdown agrees to $6.9 billion takeover by CVC consortium

LONDON — British investment platform Hargreaves Lansdown said on Friday it had agreed to a takeover offer equivalent to £5.4 billion ($6.9 billion) by a group of investors including CVC Group.

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

Shareholders in Hargreaves Lansdown — the U.K.’s biggest stockbroker — will get 1,110 British pence per share and a dividend of 30 pence per share under the deal, the company said.

Its shares rose around 2.2% in morning trading.

The news comes after the company in May rejected an offer from the consortium of £4.7 billion, or 985 pence per share. At the time, Hargreaves Lansdown said the bid “substantially” undervalued the company and its prospects.

Friday’s cash offer represents a premium of 54% to the share’s closing price of 740 pence on April 11 (the day before the group’s initial bid for the company).

Hargreaves Lansdown’s shares jumped following the May offer after a tough few years which has seen the company battle issues including regulatory changes, new incumbents in the market and the expectation 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 clients, speeding up innovation and implementing savings measures.

Hargreaves Lansdown on Friday reported earnings for the year to the end of June, with underlying profit before tax up 4% at £456 million and revenue also up 4% at £764.9 million. Net new business inflows fell 13%, however, coming in at £4.2 billion.

Analysts at Jefferies described the results as slightly above consensus and said they expect the takeover bid to go through.

“The consortium’s offer of 1,110p per share plus a 30p dividend is recommended by the board and will be supported by two of the biggest shareholders as well, the founders,” the analysts, led by Julian Roberts, said.

“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.”

Hargreaves Landsdown Chair Alison Platt said in a statement on Friday that the takeover offer “represents an attractive opportunity for HL Shareholders.”

Meanwhile, representatives from CVC Private Equity Group, Nordic Capital Advisors and the Abu Dhabi Investment Authority said Hargreaves Landsdown “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.”

“We look forward to partnering with HL’s management to accelerate its transformation plan – including investment in technology infrastructure, digital channels, and service enhancement – all with client value, service, speed of innovation, and HL’s clear purpose at the core,” they added.