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Hargreaves Lansdown has agreed to a £5.4bn takeover by a consortium of personal fairness corporations that can take the UK’s largest DIY funding website off the London inventory market.
The consortium, which is made up of CVC Capital Companions, Nordic Capital and Abu Dhabi Funding Authority, have agreed to pay £11.40 a share in money for every Hargreaves Lansdown share.
The value features a last dividend of 30p for the final monetary 12 months. The deal contains an “various” possibility for shareholders who wish to keep invested in Hargreaves Lansdown, by permitting them to roll over their stake into the unlisted firm.
The FTSE 100 firm was based in 1981 by Peter Hargreaves and Stephen Lansdown, and sells merchandise reminiscent of particular person pensions on to clients.
Hargreaves, who owns virtually 20 per cent of the corporate, helps the deal and can promote 50 per cent of his stake whereas additionally preserving the remainder within the enterprise underneath its new house owners. Lansdown has opted to promote his total near-6 per cent holding.
The choice for shareholders to maintain a portion of their stakes underneath the brand new house owners has drawn criticism as a result of it could exclude traders who’re unable to have holdings in unlisted corporations.
Hargreaves Lansdown is the newest firm to delist from the London market, including to a stream of companies picked off by non-public fairness corporations and different acquirers that view UK corporations as comparatively low-cost.
The board “believes that the money provide represents a gorgeous alternative for HL Shareholders . . . which is probably not achievable till the execution of the technique is delivered over the medium to long term”, mentioned Alison Platt, chair of Hargreaves Lansdown.
Shares within the firm have fallen again from a peak of £24 in 2019 following criticism over the price of its expertise overhaul underneath earlier administration. Underneath Dan Olley, who turned chief govt a 12 months in the past, Hargreaves Lansdown has refocused its efforts to enhance its expertise.
The shares climbed 1.8 per cent to £10.97 in early buying and selling on Friday.
Analysts at Jefferies mentioned though the provide represents a sizeable premium, they imagine “there’s larger worth” in Hargreaves Lansdown over the medium time period and anticipate shareholders to assist the deal.
Nordic Capital, a member of the consortium, beforehand invested in Nordnet, the same digital funding website. Nordic Capital took the enterprise non-public in 2016 after which relisted it in 2020.
