Hargreaves Lansdown rejects £4.6bn takeover bid from foreign investors

Hargreaves Lansdown

One of Bristol’s biggest private employers has blocked a £4.6bn takeover bid which is being backed by a Middle East private consortium.

Wealth manager Hargreaves Lansdown issued a statement this morning saying that the offer from the consortium had been rejected.

The group includes CVC Advisers Limited, Nordic Capital XI Delta, SCSP and Platinum Ivy, a wholly-owned subsidiary of Abu Dhabi Investment Authority.

The consortium confirmed last night that it is considering a new offer for Hargreaves Lansdown after the rejection of the latest bid.

Hargreaves Lansdown has confirmed it has received two offers for the company including the £4.6bn bid.

A statement said: “The board confirms that it unanimously rejected the proposal on the basis it substantially undervalues Hargreaves Lansdown and its future prospects.

“The board is focused on executing its strategy and looks forward to updating the market at the full year results on 9th August 2024. In the meantime, shareholders are advised to take no action.”

The consortium now have until June 19th to decide whether to make a renewed bid for the company.

Analysts Panmure Gordon say the bid undervalues the Bristol business.

A statement said: “The approach by private equity for Hargreaves echoes the broader trend across the UK market of low valuations being exploited by investors with the freedom to take a longer view.

“In this case it further highlights that what is important in the UK Wealth industry is not a few basis points of interest income or of pricing, the issues so beloved of too many commentators over the last two or more years, but the secular growth opportunity, the importance of scale and the value of a trusted brand.

“The approach made is opportunistic and pitched at a level which would be a steal for the putative bidders. The share price remains far too low.

“Hargreaves’ board has, quite rightly, rejected the most recent offer from a private equity consortium of 985p per share.

“It is a price at which the shares were trading as recently as August 2022 and less than half the peak share price in 2019. Admittedly it is a material premium to the views of some commentators who have argued that the shares are worth as little as 630p

“There has been no doubting the brickbats thrown at the company over the last few years but, as we pointed out in our recent Quarterly (“Interest in Interest” 9 April 2024) estimates have been rather resilient despite weaker markets because of the benefit of interest income, partly on client cash but also on shareholders’ own cash.”

Peter Hargreaves

The investment platform was set up by Peter Hargreaves and Bristol Sport owner Stephen Lansdown in the early 1980s and employs around 2,000 people.

Majority shareholder Peter Hargreaves, one of the richest men in the South West, has been highly critical of the board in recent years following a slump in the share price.

Last summer it was announced that the chair Deanna Oppenheimer, would be stepping down.

Her decision followed sustained criticism from Hargreaves over the firm’s rising costs and falling share price.




Click here to sign up to receive our new South West business news...