UK funding platform Hargreaves Lansdown agrees to $6.9 billion takeover by CVC consortium

LONDON — British funding platform Hargreaves Lansdown mentioned on Friday it had agreed to a takeover provide equal to £5.4 billion ($6.9 billion) by a bunch of traders together with CVC Group.

Abu Dhabi’s sovereign wealth fund and personal fairness investor Nordic Capital are additionally a part of the consortium, which mentioned this provide was closing.

Shareholders in Hargreaves Lansdown — the U.Okay.’s greatest stockbroker — will get 1,110 British pence per share and a dividend of 30 pence per share beneath the deal, the corporate mentioned.

Its shares rose round 2.2% in morning buying and selling.

The information comes after the corporate in Might rejected a suggestion from the consortium of £4.7 billion, or 985 pence per share. On the time, Hargreaves Lansdown mentioned the bid “considerably” undervalued the corporate and its prospects.

Friday’s money provide represents a premium of 54% to the share’s closing worth of 740 pence on April 11 (the day earlier than the group’s preliminary bid for the corporate).

Hargreaves Lansdown’s shares jumped following the Might provide after a tricky few years which has seen the corporate battle points together with regulatory adjustments, new incumbents out there and the expectation of falling rates of interest.

In September 2023, the funding platform — whose rivals embrace Interactive Investor and AJ Bell — outlined a brand new technique that included a renewed deal with purchasers, rushing up innovation and implementing financial savings measures.

Hargreaves Lansdown on Friday reported earnings for the yr to the tip of June, with underlying revenue earlier than tax up 4% at £456 million and income additionally up 4% at £764.9 million. Web new enterprise inflows fell 13%, nevertheless, coming in at £4.2 billion.

Analysts at Jefferies described the outcomes as barely above consensus and mentioned they anticipate the takeover bid to undergo.

“The consortium’s provide of 1,110p per share plus a 30p dividend is really helpful by the board and might be supported by two of the largest shareholders as nicely, the founders,” the analysts, led by Julian Roberts, mentioned.

“Though the provide is a 54% premium to the pre-offer share worth, we predict there’s larger worth in HL within the medium time period. Nonetheless, we anticipate the provide to succeed.”

Hargreaves Landsdown Chair Alison Platt mentioned in a press release on Friday that the takeover provide “represents a sexy alternative for HL Shareholders.”

In the meantime, representatives from CVC Non-public Fairness Group, Nordic Capital Advisors and the Abu Dhabi Funding Authority mentioned Hargreaves Landsdown “requires substantial funding in an intensive technology-led transformation to enhance HL’s proposition and resilience, and to drive the following section of HL’s progress and improvement.”

“We stay up for partnering with HL’s administration to speed up its transformation plan – together with funding in expertise infrastructure, digital channels, and repair enhancement – all with shopper worth, service, velocity of innovation, and HL’s clear objective on the core,” they added.