Hargreaves Lansdown Willing to Back Private Equity Takeover Offer

Hargreaves Lansdown’s (LON: HL.) board of directors indicated a willingness to recommend a revised takeover offer from a private equity consortium.

The consortium, led by CVC Capital Partners, is proposing to acquire Hargreaves Lansdown for 1,140p per share in cash,  of which 30p comprises a FY2024 final dividend. This represents a significant increase from previous bids, which the board rejected.

In its release on Tuesday, Hargreaves Lansdown said it “would be willing to recommend unanimously” a takeover offer from private equity firms. This is because the revised offer is at a value they deem acceptable.

If the takeover bid is successful, it would see another company delist from the London Stock Exchange. Several firms have left recently, with acquirers looking to capitalise on cheap valuations.

Hargreaves Lansdown explained that the revised proposal would give shareholders the option to receive shares in the consortium’s acquisition vehicle alongside the cash offer. The board has highlighted that it remains confident in the company’s long-term prospects but recognizes the certainty offered by the cash portion of the revised bid.

This revised offer follows three prior approaches from the consortium in recent months. The company has granted the consortium, which also comprises Nordic Capital and Platinum Ivy, a wholly-owned subsidiary of Abu Dhabi Investment Authority, access to conduct confirmatory due diligence and has set a deadline of July 19th, 2024, for a firm offer to be submitted.

It is important to note that this is not a finalized agreement, and there is no guarantee a firm offer will be made.

Hargreaves Lansdown shares jumped more than 5% in Tuesday’s session.