Hargreaves Lansdown shares surge after bid from private equity giants
Hargreaves Lansdown shares have surged this morning after the firm rejected a takeover bid by a consortium of private equity investors including CVC and Abu Dhabi’s sovereign wealth fund, the company confirmed today.
The do-it-yourself investment platform rejected the offer from the group of investors last month, which priced the firm at £4.7bn, or 985p per share, a stock exchange notice revealed today.
Hargreaves Lansdown currently sits at 979p per share, after spiking by five per cent towards the end of trading today as rumours began to emerge of a potential sale.
When the group of investors made the offer for Hargreaves on 26 April, the firm’s stock price sat at 755p, but even before the strong performance today, its share price has risen 23.6 per cent over the last month.
Shares in the firm spiked beyond 15 per cent this morning as investors bet on the investor group making another bid for the retail investment platform.
Hargreaves shares have been climbing since a quarterly trading update revealed that the investment provider saw total revenue jump to £199.7m in the first three months of the year, up from £188.1m.
Hargreaves Lansdown said the boost came as a result of “increased dealing volumes and higher platform revenue”.
While currently in the FTSE 250, the investment firm’s recent strong performance would push it into the FTSE 100 at the next London Stock Exchange re-balancing, sitting as the 97th largest publicly listed company in the UK as of last week.
Hargreaves Lansdown was relegated from the FTSE 100 last November for the first time since it joined the blue chip index in 2011.
If taken over, the investment firm would join a long line of companies departing from the London Stock Exchange in recent months.
The group bidding for the company consists of private equity giants CVC, Nordic Capital, and Platinum Ivy, the latter of which is owned by the Abu Dhabi Investment Authority.
CVC in particular has been on a takeover rampage in the UK, earlier this year acquiring Runescape developer Jagex for £910m.
According to the UK Takeover Code, the private equity group must either announce a firm intention to make an offer or state it does not intend to make an offer by 19 June.
“There can be no certainty that any firm offer will be made,” said the group of investors, adding: “A further announcement will be made as and when appropriate.”
In a statement to the markets on Thursday morning, Hargreaves Lansdown “confirms that it had previously received two approaches from the Consortium.. most recently at a price of 985 pence per ordinary share.”
The company said its board “unanimously rejected” because it “substantially undervalues Hargreaves Lansdown and its future prospects” as it advised shareholders “to take no action.”
Hargreaves Lansdown noted that a fresh offer has to come in “by not later than 5.00 pm on 19th June 2024, being 28 days after today’s date”, with the consortium showing a “firm intention to make an offer ..or announce that it does not intend to make an offer.”