Hargreaves Lansdown agrees £5.4bn private equity takeover

A £5.4bn bid for wealth management firm Hargreaves Lansdown has finally been made, after months of negotiations with the Bristol-based retail investment site.

The consortium of bidders is made up of buyout giant CVC, Copenhagen’s Nordic Capital and Abu Dhabi Investment Authority-owned Platinum Ivy.

The deadline for a bid, which was today, had already been pushed back three times after the original proposal was agreed in June. Several lower bids from the consortium had been rejected.

Hargreaves Lansdown’s independent directors will “unanimously recommend” the cash offer., which values each share at 1,110p, a 54% premium on the price when the consortium made its first approach to Hargreaves Lansdown’s board.

Shareholders can also choose to exchange their Hargreaves Lansdown shares for shares in the takeover vehicle.

In a statement, the consortium said it expects Hargreaves Lansdown “to benefit from numerous tailwinds over the coming decade, driven by increased individual responsibility for savings, pension freedom, an aging population, further digitalisation of the wealth process, the increasing importance of data, and AI-led activities”.

But it warned the direct-to-consumer market “will become significantly more competitive”, with established competitors and new entrants using technology to disrupt the market.

It added: “A transformation of the scale Bidco envisages as appropriate requires investment, in particular in the technology platform to position HL to offer its clients user-friendly digital channels, inspiring client journeys (both online and through the Helpdesk) and differentiated financial products.

“HL will be repositioned and further strengthened by the transformation. However, to deliver such a transformation, it will require change, investment, time to implement fully and time for the benefits to be reflected in the future financial performance of HL.

“As a result, Bidco believes HL will be able to execute more effectively, accelerate implementation and deliver the growth potential of its transformation plan better as a private company without all the requirements of a public company.”