Hargreaves Lansdown sells his soul by leaning into private equity fun money, says ALEX BRUMMER

When you push the door hard enough, it eventually sags.

The private equity consortium stalking investor platform Hargreaves Lansdown has put forward an offer price of £5.4bn, or £11.40 a share, which the board, led by new chair Alison Platt, is willing to accept.

Why should we expect anything different? A year ago, it sold the UK’s leading veterinary pharmaceutical group, Dechra, to Swedish financial group EQT.

Major shareholder and co-founder Peter Hargreaves seems delighted.

He does not avoid the blushes of the previous president, Deanna Oppenheimer, or the CEO, Chris Hill, whom he describes as “equally useless.”

As attractive as the 55 percent share price premium may seem, investors should consider the context.

Platt and CEO Dan Olley are silent on broader stakeholder interest or the strategy of potential owners, which include CVC, Nordic Capital and Platinum Ivy – Abu Dhabi in disguise.

The price may seem generous. But like much of the UK financial sector, HL shares have been stagnant and a London rerating could see the stock regain its mojo.

Personally, I and many other HL clients have never forgiven him for exposing us so much to Neil Woodford’s ruined investment funds.

However, HL is a pioneer in promoting the Thatcherite dream of shareholder democracy.

It provided an important direct bridge to capital investment and funds for savers at a time when banks, with the exception of Barclays, moved away from stockbroking.

There is no reason why you shouldn’t continue independently rather than allowing a debt-free balance sheet to be loaded with fake money.

If a deal was necessary, then it would be much better if HL had aligned itself with one of the UK’s big financial players rather than bowing to a consortium without a strategy.

Royal Mail Alert

Don’t let anyone say that ownership doesn’t matter. Thames Water’s problems under remote, mainly foreign shareholders, are well documented.

On a more parochial level, Asda’s exit from the secure ownership of US retail master Walmart into the hands of private equity backers TDR and entrepreneurs Mohsin and Zuber Issa has proven salutary.

Data from market research group Kantar shows Asda lost 4 per cent market share year on year, losing ground to Tesco and Sainsbury’s, as well as Aldi and Lidl.

Critics of our campaign to stop Czech sphinx Daniel Kretinsky spending £3.6bn buying International Distributions Services, which owns the Royal Mail, argue that it has been so mismanaged that it would benefit from tough private ownership.

This is naïve, as demonstrated by the private equity ownership of Asda and Morrisons.

Under the tutelage of former Tesco boss Terry Leahy, Bradford-based Morrisons is showing signs of making a comeback. The debt burden on both groups, in a period of high interest rates, has killed investments.

At Asda, the Issa brothers’ accumulated debt load is one of the factors that led to Zuber’s departure and increased stake in private equity group TDR.

Royal Mail needs focused management, a renewed relationship with unions and investment, not a pile of extra debt and owners without a cultural understanding of the UK.

bailey push

Politics should play no role in the Bank of England’s interest rate decision tomorrow. It should follow the European Central Bank’s lead and look beyond the July 4 election and cut its key interest rate from the current 5.25 percent.

Inflation is in full decline. The latest data from Kantar shows that annual food price inflation fell to 2.1 percent in the past month from 2.4 percent.

Lower food and energy costs should be reflected in the latest official figures expected today, with some forecasters expecting the overall consumer price index to fall below the 2 percent target. Service sector costs are moderating.

Wages are outpacing prices, but all evidence suggests a weakening labor market. The settlement trend is downward. Our message to Andrew Bailey and the Bank: be bold.