Hargreaves Lansdown Share Discussion Threads

[ochs] 19/6/2024 09:20

Yes @AdamB1978 and I don't think the board have thought it through on behalf of private investors who hold HL shares in their ISA (as HL always encourages clients to do!) because the unlisted equity vehicle won't be ISA eligible. Effectively they are shafting many of their own clients and employees by forcing them to take cash when those investors know that £11-10 is very cheap for HL and it's future potential and client base.

I'm sure the equity alternative offer is to appease big shareholders like Peter H and allow them to retain their holding. Sadly he seems to be going along with it if this story is true

Private Equity almost always make job cuts (on average I read 30% of the workforce!) so you'd assume most HL employees would be up in arms about this and they should write an open letter to the board signed by as many as possible making clear there is no need to accept this offer and that the company should remain headquartered in Bristol and be proud of it's roots and independence.

[adamb1978] 19/6/2024 07:40

Ochs

Agree wiht your post a few above about the value upside from the stub equity.

I think that equity is attractive in terms of returns - veyr high probability that it beats the wider market, however the price you pay is illiquidity. Some will accept that price, some won't

Adam

[misterd1] 19/6/2024 06:56

Its a No from me Simon

[con90210] 18/6/2024 18:50

Naughty that Sky News reporting the £10.50 proposed bid before any RNS released. Share price dropped quickly on that rumour!

[growthpotential] 18/6/2024 18:45

I will be rejecting the proposal

[smurfy2001] 18/6/2024 18:26

Another company bought on the cheap. The UK market hasn't had the big investor cash it deserves.

[growthpotential] 18/6/2024 18:13

So disappointed in this, Hargreaves needs to reject this bid and back his own firm to grow without changing the shareholder base and screwing smaller Private Investors over

[lomax99] 18/6/2024 18:02

If the EP crew want a 3-5 year exit, then they'll be expecting £17 - £23 at float, with a healthy dose of debt to fund the large dividends they extract in the mean time.

[lomax99] 18/6/2024 17:44

Actually it's only 12.7% higher, if you exclude the 30p dividend (for the year which ends in just 12 days.

[ochs] 18/6/2024 17:41

@lomax I agree, pretty feeble from the board.

btw it confirms right at the end of the RNS that "the board" does NOT include Peter H's rep - "Comprising Hargreaves Lansdown's full Board excluding Peter Hargreaves' shareholder representative, who is a non-independent non-executive director."

So we don't know for sure if Peter H would accept that offer, but you'd guess the equity option has been added to allow big shareholders to retain a holding, and might be enough to appease him.

[lomax99] 18/6/2024 17:38

FT article today:

Lansdown, who owns a stake of about 6 per cent, told the FT over the weekend that price was “not the main consideration” noting that he would want to know what private equity firms would want to do with the business if they bought it.

He said on Tuesday: “It is good that we have an offer to consider. We now have to do our homework to see whether it works for clients, shareholders and staff. There is a long way to go before it becomes a reality.”

———;——


How can the board say at £9.85 that bid ‘Seriously under values’ HL, and then say a bid just c 16 % higher is acceptable??

[lomax99] 18/6/2024 17:15

Ochs, thanks. Disillusioned if the board genuinely thinks the sum of their ambition is £11.10 and the final dividend we would be due anyway.

[ochs] 18/6/2024 17:15

Well done on buying around £8 - very astute and good dividends whilst you waited...

[oggyrocks] 18/6/2024 17:06

Thanks Ochs - I bought about 8 when Liz Truss was in power, so in profit (plus had a few dividends reinvested).

Almost sold today, but think I will hold for a couple more days and see what happens. This might bring out another bidder - it does seem cheap given the potential of the company.

Smallest holding in my ISA portfolio, but all profits are good. Not sure what I would reinvest in, so maybe best to hold.

[ochs] 18/6/2024 16:40

@lomax it seems the board are saying they will recommend it IF the consortium come back with a firm bid (which they probably will do).

@GrowthPotential, I don't think you can hold unlisted shares in an ISA. You could potentially sell your HL shares in the ISA... move the cash to a Fund & Share account and re-buy the same shares. If you ring HL and ask they could probably do what's known as a "Put through" to reduce the spread for you. However be aware you'd no longer have the tax benefits of holding them in an ISA.

[ochs] 18/6/2024 16:36

@oggyrocks it's a personal decision whether you take the money now or wait. If you bought well under £9 you'll probably be happy with the profit. Now that the deadline has been extended until 19 July there's still a possibility of another competing bidder stepping forward, so we might still hope for closer to £12 as a final offer.

My average is 1,155p so whilst disappointing if 1,140p is the final bid, it does show the value of continuously averaging down on long term investments which you still believe in.

ps. I would certainly vote against 1,140p.

[growthpotential] 18/6/2024 16:23

Don't think this deal will go through, but if it did, can I still hold the unlisted shares in my ISA or would I have the option to hold on my trading account(?)

[lomax99] 18/6/2024 16:02

So are the board actually recommending this? Or are they saying they feel obliged to put the offer forward for shareholders to vote on. Pretty weak offer to be recommending.

[robinnicolson] 18/6/2024 16:00

Peter Hargreaves, speaking to the FT:

"It's a disgrace that it's come to this. It was classified as one of the best-run companies in the UK ten years ago." He wanted to make sure HL's chair, "thinks it is the right price".

[ochs] 18/6/2024 15:49

@AdamB1978 I think the unlisted investment wouldn't be able to stay in an ISA, but SIPP rules are less strict - so it would likely be ok in a SIPP (for example some SIPPs already allow unlisted investments and/or commercial property which are both pretty illiquid).

I guess the advantage of taking the equity stake is that you would benefit from any future sale by the Consortium - Private Equity typically only invests for 3 to 5 years and then try to sell on for a profit. If you think they're getting HL on the cheap then chances are that would be the plan in a few years time. It might even be floated again in the future. Be interesting to know if they'd plan to pay dividends in the meantime?

[giltedge1] 18/6/2024 15:35

Looks like a cave in, can,t imagine founders accepting I won't be.

[lomax99] 18/6/2024 14:59

Somewhat underwhelmed by the revised bid.Letting this be taken private, using a rollover for key investors, has a distinctly grubby feel to it, and would not be a good look - casting private investors aside like the proverbial oily rag.Also doesn't really fit with the recent FT article quoting SL.

[growthpotential] 18/6/2024 14:50

Interactive Investor probably a good option + IG Group, possibly CMC Markets with CMC Invest

[growthpotential] 18/6/2024 14:25

I need 1468p + 5 years of market returns to breakeven please

[dickbush] 18/6/2024 14:14

The fat lady hasn't sung yet. There's still a chance that this bid will bring out a competitor. Only needs to be 10% higher which still, IMO, is on the cheap side for this company.