Hargreaves Lansdown has rebuffed a £4.7 billion (S$8.07 billion) offer for the investment platform from a group of private equity buyers including an Abu Dhabi sovereign wealth fund, saying it undervalues the firm.
CVC Capital Partners, Nordic Capital and Platinum Ivy – a subsidiary of Abu Dhabi Investment Authority (Adia) – approached the UK firm’s board on April 26 with an offer of US$12.54 per share, according to a regulatory filing on Wednesday (May 22).
Hargreaves Lansdown separately said its board “unanimously rejected” the offer – along with an earlier one – because it “substantially undervalues Hargreaves Lansdown” and its prospects. The late April approach was 30 per cent above the share price at the time but they have risen sharply since then, erasing that premium.
“The board is focused on executing its strategy and looks forward to updating the market at the full year results on 9th August 2024,” the firm said. “In the meantime, shareholders are advised to take no action.”
The consortium said it was continuing to consider “a possible offer” for the Bristol-based company and a “further announcement will be made as and when appropriate.” The approach is the latest deal to ripple through UK finance, with Nationwide’s acquisition of Virgin Money and Coventry’s purchase of Co-Op Bank both in motion.
Hargreaves Lansdown is the UK’s largest platform for retail investors, with more than 1.8 million customers and £150 billion in assets under management and administration. But in recent years rivals like AJ Bell and Interactive Investor have started to win market share, helped by their lower fees.
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Citigroup analysts said in a note that they view the bid “as rich and therefore do not expect a further bid to come at a significant premium.” A private owner “would require significant levers for growth, likely through cost reductions or expanding the product offering.”
UK takeover rules means the consortium must declare by 5pm on June 19 whether or not it intends to make a further offer.
Peter Hargreaves co-founded the company in 1981 alongside Stephen Lansdown. They started out providing information to clients on unit trusts and tax planning, and then went public in 2007.
While both have sold stakes in recent years, they still own about a quarter of the company, according to its website. Their stakes put them among the richest people in the UK. BLOOMBERG
