Thursday, May 23, 2024 7:04 AM
Shares in Hargreaves Lansdown rose this morning after the firm rejected a takeover bid from a consortium of private equity investors including CVC and Abu Dhabi’s sovereign wealth fund, the company confirmed today.
The DIY investment platform last month rejected an offer from a group of investors that valued the company at 4.7 billion pounds, or 985p per share, as disclosed in a stock exchange filing today.
Hargreaves Lansdown is currently at 979p a share, after rising five per cent in late trading today as rumors of a possible sale began to emerge.
When the group of investors made an offer for Hargreaves on April 26, the company’s share price was at 755p, but even before today’s strong performance, its share price had risen 23.6 per cent over the past month.
The company’s shares jumped more than 15 percent this morning as investors bet on an investor group making another bid for the retail investment platform.
Shares in Hargreaves have been rising since a quarterly trading update which revealed the investment provider saw total revenue rise to £199.7m in the first three months of the year, from £188.1m.
Hargreaves Lansdown said the boost came as a result of “increased trading volumes and higher platform revenue”.
While it is currently on the FTSE 250, the investment firm’s recent strong performance would propel it into the FTSE 100 at the next London Stock Exchange rebalancing, where it ranked as the UK’s 97th largest publicly traded company last week.
Hargreaves Lansdown dropped out of the FTSE 100 last November for the first time since joining the blue chip index in 2011.
If taken over, the investment firm would join a long line of companies that have delisted from the London Stock Exchange in recent months.
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.
CVC, in particular, has been raging in the UK, acquiring Runescape developer Jagex for £910m earlier this year.
Under the UK’s takeover code, a private equity group must either announce a firm intention to make an offer or indicate that it does not intend to make an offer by June 19.
“There can be no certainty that any firm offer will be made,” the investor group said, adding: “A further announcement will be made when appropriate.”
In a statement to the markets on Thursday morning, Hargreaves Lansdown “confirms that it has previously received two approaches from a consortium … most recently at a price of 985p per ordinary share”.
The company said its board had “unanimously declined” as it “substantially undervalues ​​Hargreaves Lansdown and its future prospects” as it advised shareholders to “take no action”.
Hargreaves Lansdown noted that the new offer must be delivered “no later than 7:00 p.m.Thursday June 2024, i.e. 28 days after today’s date”, with the consortium showing a “firm intention to make an offer ..or to announce that it does not intend to make an offer”.