Leading FTSE 100 investment firm Hargreaves Lansdown (HL) has initially agreed to a takeover offer worth £5.44bn.
Under the terms of the 1,140p-per-share offer, investors in the Bristol-based company will get 1,110p per share in cash, plus a dividend of 30p per share.
The group of bidders includes buyout giant CVC, alongside Nordic Capital, and Platinum Ivy, a wholly owned subsidiary of wealth fund the Abu Dhabi Investment Authority (ADIA). The consortium is split equally between the three firms.
It comes following lengthy talks which had to be extended, as Sky News revealed earlier this summer, after Hargreaves directors rejected an initial 985p per share deal.
Shareholders must approve the deal before it goes through.
In a stock market update, the consortium said the takeover was likely to be completed in the first quarter of 2025, pending approval.
Hargreaves Lansdown’s chairwoman Alison Platt described the deal as an “attractive opportunity for HL shareholders to realise an immediate and certain cash value for their investment at a level which may not be achievable until the execution of the strategy is delivered over the medium to longer term”.
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The firm, which was founded in 1981, is the UK’s biggest DIY investment platform and has around 1.9 million customers.
AdvertisementIt has been a publicly traded company since 2007, but the deal would make it the latest big player to leave the London Stock Exchange.
HL’s shares were up more than 2% during trading on Friday following the announcement.
Representatives from the bidding team described the firm as a “strong, trusted brand” in a joint statement.
They added: “As a consortium, we are aligned with management that, despite these strengths, the company now requires substantial investment in an extensive technology-led transformation to improve HL’s proposition and resilience, and to drive the next phase of HL’s growth and development.”
“The consortium brings extensive experience in supporting businesses undergoing transformation, and its members have long records of investing in regulated financial services companies to build better businesses and create better customer experiences.”
It came as HL released its results for the year ended 30 June, including underlying pre-tax profit of £456m, a 4% rise on the previous period.
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Vivek Raja, an analyst at Shore Capital Markets, said it was expected that the deal would be approved by shareholders.
He added: “We don’t get the sense that there is sufficient shareholder resistance to the proposal and the indicative offer… is in our view a great price for the buyer.”