Hargreaves Lansdown (HL), the UK's largest savings and investment platform, has accepted a £5.4bn takeover offer by private equity firms Nordic Capital, CVC Capital Partners and Abu Dhabi Investment Authority's subsidiary Platinum Ivy.
The offer means that Hargreaves Lansdown shareholders will receive £11.40 for each share they own. In addition to this, they will receive 30p in dividends for each share they own. Shareholders will be able to take the cash offered by the consortium or invest their existing shares in the new company if they choose to do so.
The deal was backed by the company's co-founders Peter Hargreaves and Stephen Lansdown, who collectively own around 25% of the company.
Hargreaves Lansdown shares rose by around 2% following the announcement on Friday (August 9), representing a 55% price increase since the start of the year.
The news comes after HL published its preliminary results for the last financial year. In the year to June 2024, there were more than 1.8 million active clients, representing an increase of 78,000 in one year. Revenue rose by 4% from around £735m to £764m. However, pre-tax profits decreased by 2%, falling to £396.3m.
Dan Olley, Chief Executive Officer of Hargreaves Lansdown, commented on the results: "It has been an eventful first 12 months, not least with the approach from the consortium which has today resulted in a firm and final offer for HL, with the Independent Board of HL intending to unanimously recommend the cash offer to shareholders.
"As I made clear on joining, we need to help more people across the UK save and invest to secure their financial future, so for us this is more than a mission, it's an obligation. I have therefore been reassured during process that the consortium are aligned with our mission."
Hargreaves Lansdown is one of several companies to leave the London Stock Exchange in favour of the private equity market or other exchanges around the world.
Who is taking over Hargreaves Lansdown?
Hargreaves Lansdown is being taken over by a consortium of private equity firms including Stockholm-based Nordic Capital, Luxembourg-based CVC Capital Partners and UAE-based Platinum Ivy (a subsidiary of the Abu Dhabi Investment Authority).
The foreign equity firms' consortium is the newly formed private limited company Harp Bidco, which was created for the purpose of the takeover and will be indirectly owned in equal parts by all three companies.
What's next for Hargreaves Lansdown?
Harp Bidco has hinted at a "substantial transformation" in plans to deliver Hargreaves Lansdown's mission, with a particular emphasis on the platform's technology.
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, said: "HL has an important purpose: to make it easy for people to save and invest for a better future. Over the 40 years since it was founded, HL has built a strong, trusted brand, underpinned by high levels of customer loyalty and advocacy.
"As a consortium, we are aligned with management that, despite these strengths, 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.
"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."
The Hargreaves Lansdown acquisition is expected to be finalised in the first quarter of 2025 subject to the satisfaction of various conditions outlined in the offer letter and supporting documentation.
