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Private equity giants face deadline for Hargreaves Lansdown bid

Last month, Hargreaves Lansdown spurned an unsolicited offer of £47bn because it “substantially undervalues" the company.
Last month, Hargreaves Lansdown spurned an unsolicited offer of £47bn because it “substantially undervalues" the company.

The deadline for a consortium of private equity giants to firm up a takeover bid for Hargreaves Lansdown, Britain’s largest investment platform, falls this Wednesday.

Last month, the company revealed its board “unanimously rejected” an unsolicited offer of £47bn, or £9.85 per share, because it “substantially undervalues Hargreaves Lansdown and its future prospects”.

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.

According to the UK Takeover Code, the private equity trio must either announce a firm intention to make an offer or state it does not intend to make an offer by 19 June.

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Peter Hargreaves and Stephen Lansdown, who co-founded the platform in 1981, collectively own a quarter of the company’s shares, meaning they hold significant sway over the final decision.

Hargreaves, whose 20 per cent stake makes him the largest single shareholder, told the Daily Mail he was “looking at all options”. Lansdown told the Financial Times over the weekend that “price is not the main consideration” as much as the future direction of the business. He holds a nearly six per cent stake.

The platform’s recent struggles include a controversial association with the now-defunct Neil Woodford’s funds and criticism over fee structures. Hargreaves Lansdown charges investors 0.45 per cent a year compared to AJ Bell’s annual fee of 0.25 per cent.

Regulatory scrutiny has also intensified lately, with the Financial Conduct Authority mandating new consumer duty rules to prevent companies overcharging for services.

Under the leadership of chief executive Dan Olley, who stepped into the role last year, the firm has reaped a lot of revenue from its cash interest reward, taken cost-cutting measures and refocused its digital offerings.