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Hargreaves Lansdown has extended the deadline again for private equity firms to make a takeover offer for the UK’s largest retail investment site, which could value it at £5.4bn.
The board of Hargreaves Lansdown said it had asked the UK Takeover Panel for a second time to push back the date, as discussions between the investment site and the private equity firms — led by CVC Capital Partners — were “ongoing”.
The delay comes a month after the group of private equity firms, which includes Nordic Capital and Platinum Ivy, a wholly owned subsidiary of the Abu Dhabi Investment Authority, made an offer of £11.40 a share. The board of Hargreaves Lansdown said at the time it was willing to “recommend unanimously” the proposal.
A source close to the situation said the extension, until August 5, was aimed at providing more time for the companies to finalise details of the acquisition such as how it should be structured, which has received some criticism from investors.
If the takeover goes ahead, Hargreaves Lansdown will be the latest company to delist from the London Stock Exchange in recent months, following a stream of businesses picked off by private equity firms and other acquirers that have taken the view that UK companies are relatively cheap.
The trend comes as other UK companies have moved to US stock exchanges to access a deeper pool of investors and attract a higher valuation.
Some investors have raised concerns over the potential deal. Lancaster Investment Management said last month it was “unconvinced that this offer is fair for all HL shareholders” due to the way it could be structured.
The proposed deal would allow shareholders to reinvest their stock in the private equity group’s unlisted vehicle, up to a maximum of 35 per cent of the company’s equity. But this could squeeze out funds that are not allowed to own unlisted investments.
The Bristol-based company, known for selling financial products such as Individual Savings Accounts and personal pensions directly to investors, was founded four decades ago by Peter Hargreaves and Stephen Lansdown. It recently appointed Alison Platt as chair, while Dan Olley was made chief executive in August last year.
Hargreaves, who owns about a fifth of the stock, told the Financial Times last month it was “a disgrace” that the company was in a situation where it could be acquired. “It was classified as one of the best-run companies in the UK 10 years ago,” he said at the time.
Shares in the company have fallen back from a peak of £24 in 2019 following criticism over the cost of its technology overhaul under previous management. Shares were trading at about £11 early on Friday — although the stock exchange was suffering from a technical glitch.
Hargreaves Lansdown reported that assets on its site had reached a record £155.3bn following an influx of customers and investments ahead of the tax year-end in April. It attracted 24,000 new customers, marking an increase from 13,000 in the same period a year ago. Ben Bathurst, analyst at RBC Capital Markets, said the number of new clients was “stronger than expected”.
