Hargreaves shareholders say sure to takeover deal

Hargreaves Lansdown shareholders have overwhelmingly approved the investment firm’s £5.4billion takeover by a private equity-led consortium. 

Around 87 per cent of the group’s investors voted in favour of the deal at a general meeting on Monday, while 13.4 per cent voting against.

Once the sale is finalised, investors will receive £11.40 in cash for every share they hold, as well as a 30p per share dividend.

Hargreaves’ co-founders, Peter Hargreaves and Stephen Lansdown, who own about a quarter of the company’s shares between them, are set to receive £535million and £309million, respectively.

The business agreed to be bought in August by a consortium involving CVC Capital Partners, Nordic Capital and Platinum Ivy, a subsidiary of sovereign wealth fund the Abu Dhabi Investment Authority.

The trio initially put forward a £4.7billion offer in May, but the Hargreaves board resoundingly rejected this bid as they said it undervalued group.

After the new proposal was made, Stephen Lansdown, 72, questioned its price, telling The Times it was ‘not the greatest deal in the world’, though he accepted it would bring the firm ‘into another era when it can progress and grow’.

Based in Bristol, Hargreaves is the UK’s largest retail investment platform, with £155.3billion of assets under management and nearly 1.9 million clients as of June.

The company enjoyed significant expansion during the lockdown era when many young Britons with spare cash tried their hands at retail investing for the first time.

However, growth started slowing as Covid-related restrictions were loosened and the Bank of England hiked interest rates due to surging inflation.

Despite increasing profits, Hargreaves was relegated to the FTSE 250 Index last December after its share price plunged by over two-thirds from its pre-pandemic peak. It was promoted back to the FTSE 100 in May.

Hargreaves’ planned sale comes amidst a flurry of acquisition activity involving London-listed businesses, which are often perceived as undervalued.

In recent months, cybersecurity giant Darktrace, Robinsons Squash maker Britvic, video games firm Keywords Studios, and packaging provider DS Smith are just some of those to have agreed to billion-pound takeover deals.

Not all acquisition deals have been successful, though – property website Rightmove turned down a £6.2billion offer from REA Group, whose majority shareholder is Rupert Murdoch’s News Corporation.

Hargreaves Lansdown shares were virtually flat on mid-Tuesday afternoon, up 0.1 per cent or 1p, at £10.87, far below their peak of £24.19 in May 2019.