Home Money Founder backs Hargreaves deal as private equity predators raise takeover bid to £5.4bn

Founder backs Hargreaves deal as private equity predators raise takeover bid to £5.4bn

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Peter Hargreaves' 19.8% stake in Hargreaves Lansdown is worth £1.1bn

The founders of Hargreaves Lansdown (HL) last night backed an enhanced £5.4bn takeover bid for the investment platform.

Peter Hargreaves – who has a 20 per cent stake in the company – told the Mail he would be “very happy” to support the bid by a private equity consortium backed by Middle Eastern money.

Stephen Lansdown, who has a 5.7 per cent stake, said he was “pleased” with developments and described the offer as “something to consider”.

The comments came after the board, led by chair Alison Platt, said it would accept the offer of 1,140 pence per share from CVC Capital Partners, Nordic Capital and Platinum Ivy, owned by Abu Dhabi’s sovereign wealth fund.

HL shares soared 5.3 per cent, or 56.5 pence, to 1,130 pence as it looked set to become the latest London-listed company to be bought.

Stephen Lansdown's 5.7% stake is valued at £309m

Founders: Peter Hargreaves’ (left) 19.8% stake in Hargreaves Lansdown is worth £1.1bn, while co-founder Stephen Lansdown’s (right) 5.7% stake is valued at £309m.

Britain’s biggest stockbroker previously rejected three proposals from the consortium, including one valued at £4.7bn.

But yesterday he backed the improved bid, putting Platt on track to oversee the sale of another London-listed company, having been chairman of Dechra Pharmaceuticals when it was sold to Swedish firm EQT for £4.5bn last year.

Hargreaves, 77, and Lansdown, 71, founded the company in 1981 and took it public in 2007.

The FTSE 100 company is the country’s largest investment platform with almost two million clients.

But HL became embroiled in the scandal surrounding the collapse of Neil Woodford’s investment empire, having been a staunch defender of the fund manager.

HL shares fell from a high of £24 in 2019 to £7 earlier this year.

Speaking to the Mail, Hargreaves criticized the previous management and said Platt and new boss Dan Olley have had to “clean up their mess”.

The businessman, who remains HL’s largest shareholder, said: “I think (the acquisition) is going to work very, very well.”

I think it will be a good solution. If the president recommends it, I will be happy to support his decision.’

The deal would value Hargreaves’ 19.8% stake at £1.1bn and Lansdown’s 5.7% stake at £309m. Lansdown, the fourth-largest shareholder, said it was willing to consider the deal.

“It’s something we need to consider now and the board will support it, so we’re going to move forward with the process,” he told Bloomberg. “I’m glad we’ve come to something definitive and we’ll do our homework now.”

Shareholders will be able to transfer their stake to the new unlisted company or accept the cash. An HL spokesperson said yesterday that the board “will engage with the consortium” as it seeks to reach an agreement.

The spokesman said the proposed offer “is of a value that the board would be prepared to unanimously recommend to Hargreaves Lansdown shareholders” should a firm offer be made.

The consortium has until 5:00 p.m. on July 19 to present a firm offer.

HL is just the latest London-listed company to succumb to a takeover as bidders scour the stock market for bargains, fueling fears the shares are undervalued.

Shareholders of cybersecurity group Darktrace yesterday voted in favor of a £5.2bn takeover by US private equity group Thoma Bravo.

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