Linked media – Connected media
In a significant move in the financial sector, UK-based investment service Hargreaves Lansdown has confirmed its acceptance of a £5.4 billion ($6.9 billion) buyout offer from a consortium led by CVC Group. The deal, announced on Friday from their Bristol headquarters, also involves stakes from Abu Dhabi’s sovereign wealth fund and Nordic Capital, marking the proposal as definitive.
As per the agreement terms, Hargreaves Lansdown shareholders will receive 1,110 pence per share plus an additional 30 pence per share as a dividend. Following this announcement, the company’s stock experienced a 2.2% increase during morning trading sessions.
This development comes after a previous £4.7 billion bid by the same consortium was declined in May, as it was deemed by Hargreaves Lansdown to significantly undervalue the firm and its future prospects. The new offer, a notable 54% premium over the share price before the initial bid, has been well-received in the market.
The investment platform, which is the largest stockbroker in the UK and competes with firms like Interactive Investor and AJ Bell, has been navigating numerous challenges, including regulatory shifts, increased competition, and changing interest rates. In response to these challenges, Hargreaves Lansdown unveiled a strategic overhaul in September 2023 that focused on customer engagement, innovation acceleration, and cost efficiency.
Financial performance for the year ending June showed a 4% increase in both underlying pre-tax profits and revenue, although there was a 13% decline in net new business inflows. Analysts from Jefferies have regarded these results as slightly above expectations and anticipate the takeover bid to be accepted.
The deal is strongly backed by the company’s board and key shareholders, including its founders. Despite the substantial premium offered, analysts believe the company holds greater value over the medium term but still predict the success of the acquisition.
Chairwoman Alison Platt remarked that the takeover is a lucrative prospect for shareholders, emphasizing the transformational investment planned for Hargreys Lansdown, particularly in technological advancements and customer service improvements. Consortium representatives from CVC, Nordic Capital, and the Abu Dhabi Investment Authority are eager to initiate these strategic enhancements, aiming to bolster Hargreaves Lansdown’s market position and growth trajectory.
Connected media – Associated media
