Hargreaves Lansdown founder eying ‘all choices’ after takeover bid

On May 23, 2024

By John-Paul Ford Rojas and Leah Montebello

Updated: 22:01, 23 May 2024

The co-founder of Hargreaves Lansdown last night said he was ‘looking at all options’ after a shock foreign takeover bid threw the investment platform’s future into doubt.

Peter Hargreaves said he was ‘watching with interest’ after the board rejected a £4.67billion approach from a consortium including private equity group CVC and Abu Dhabi investors.

The tycoon, 77, who is no longer involved in the firm’s day-to-day running, owns a near-20 per cent stake worth just over £1billion.

Reports suggested Hargreaves was open to taking the firm private but he told the Mail: ‘That’s a lie. I have never said that.’

But he added: ‘I am looking at all options. I am not really making any comment because I don’t think there is enough information out there.’

Stake: Hargreaves Lansdown co-founder Peter Hargreaves (pictured) said he was ‘watching with interest’ after the board rejected a £4.67bn approach from a consortium of investors

Asked whether Hargreaves Lansdown ought to engage with its takeover suitors, he said: ‘That is not for me to say. The directors must make that decision not me.’

The board said that it ‘unanimously rejected’ the surprise proposal of 985p per share, stating it ‘substantially undervalues’ the business.

Another London-listed company – shopping centre operator Capital & Regional – confirmed it had received a takeover proposal from South African competitor Vukile, while another rival Newriver was circling.

Shares in Hargreaves Lansdown, which was set up in 1981, rose 14.4 per cent, or 141p, to 1120p while Capital & Regional climbed 18.5 per cent, or 9.5p, to 61p.

The latest flurry takes the total value of bids made for UK companies so far this year to more than £80billion.

New figures from the investment firm Dealogic, shared with the Mail, suggest that there have now been £73billion completed or pending deals this year and £8.5billion in withdrawn or cancelled advances.

Among those targeted are packaging group DS Smith, telecoms testing company Spirent Communications and haulage firm Wincanton.

FTSE 250 cyber-security group Darktrace recently backed a £4.2billion takeover by US private equity firm Thoma Bravo.

But some companies, although targeted, have been putting up a fight.

Anglo American this week rejected its third bid from rival BHP worth £39billion, while Currys and Direct Line have both defended themselves from bids.

Rumours had swirled that Hargreaves Lansdown could be approached because of its weak share price.

Activist investor UK hedge fund Palliser Capital has called for Rio Tinto to abandon its London listing for Sydney, saying the miner’s dual corporate structure is a barrier to strategic plans, making it ‘difficult to do major acquisitions’.

Rio is the seventh-largest company in the FTSE 100, with a value of over £70billion.

Booming industry is top target, says AJ Bell

The chief executive of the popular investment platform AJ Bell yesterday said that it ‘makes perfect sense’ for the sector to be targeted by bidders after a shock takeover offer was rejected by rival Hargreaves Lansdown.

But Michael Summersgill declined to comment when asked about whether his own company might face similar interest from suitors.

Summersgill was speaking as AJ Bell published its half-year results, which showed a 47 per cent increase in half-year profits to £61million and a rise in customer numbers to more than half a million.

It prompted the shares to rise 11.2 per cent, or 40.5p, to 403p. in London yesterday

The price was also likely to have been boosted by the disclosure of the Hargreaves offer lifting the valuations of rivals.

Summersgill said: ‘I see a huge growth opportunity in the platform market. That’s a market that is benefiting from structural growth.

‘We’re performing very well in that space and I can see lots of ways that we can strengthen our position still further.

‘So I’m excited about the future for AJ Bell and I can see how that could be applied to other firms in the space.

‘It makes perfect sense to me that other people would see that and look for investment opportunities within it.’

Asked specifically to rule out AJ Bell being up for sale, Summersgill said: ‘No comment.’

He added: ‘There are very well-defined ways of communicating around those sorts of topics and that’s how we would do it if we were ever in that position.’

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