Adia, CVC and Nordic Capital now own Hargreaves: A consortium comprising Abu Dhabi Investment Authority’s (Adia) subsidiary Platinum Ivy, private equity firm CVC Capital, and Sweden’s Nordic Capital acquired 100% of UK Hargreaves Lansdown for GBP 5.4 bn after the investment firm accepted the consortium’s final formal offer, according to a London Stock Exchange filing. The consortium expects to close the takeover in 1Q 2025.

Hargreaves co-founders gave the green light: Co-founders Peter Hargreaves and Stephen Lansdown, who together own a 25% stake in the firm, have both agreed to vote in favor of the offer.

The details: The transaction will see Hargreaves’ shareholders receive GBP 11.40 per share, representing a 54.1% premium over its closing price before the Adia-led consortium made its initial bid. The offering will also see the consortium pay out a GBP 0.30 per share dividend for Hargreaves last financial year, ending June 2024. The transaction also offers Hargreaves shareholders an option to roll over some or all of their shares into the consortium’s acquisition vehicle, giving them maximum equity of 35%. Peter Hargreaves plans to reinvest half of his 19.8% stake, and will pocket the remaining GBP 535 mn, according to Reuters, while Lansdown sold his entire 5.7% stake for GBP 309 mn.

This was a long time coming: Hargreaves Lansdown granted Adia and CVC Capital due diligence in July, after the consortium submitted a fourth bid following several rejections, valuing it at around GBP 5.41 bn. Hargreaves’ board said at the time it was willing to recommend the proposal. Investors had reportedly raised concerns over the fairness of the proposed takeover for Hargreaves’ shareholders, with the main sticking point being the weeding out of funds that will be unable to retain their stakes in Hargreaves following its delisting from the LSE, the Financial Times reported earlier.

Where’s the money coming from? The consortium plans to finance part of the acquisition with a GBP 1.72 bn interim senior loan facility provided by a group of private credit funds, including Apollo Global Management and KKR & Co, Bloomberg reports.

The consortium wants Hargreaves to regain ground: “The company now requires substantial investment in an extensive technology-led transformation to improve HL's proposition and resilience, and to drive the next phase of HL's growth and development,” the consortium said, emphasizing the need to improve Hargreaves’ competitive edge in the market.

The story got plenty of ink in international press: Financial Times | The Guardian | Wall Street Journal | The Independent | CNBC

Tags: