Hargreaves Lansdown Share Discussion Threads

[lomax99] 28/8/2024 06:26

Hargreaves Lansdown takeover price ‘questionable’, says co-founder
Speculation remains that the company might yet attract a higher offer, with some analysts suggesting the deal has been priced too cheaply

The co-founder of Hargreaves Lansdown has described the £5.4 billion agreed bid price for the UK’s biggest DIY investment platform as “questionable” and “not the greatest deal in the world”.

Stephen Lansdown, who co-founded the business in 1981 with Peter Hargreaves, said the £11.10 per share take-private offer was nevertheless “fair” and would remove the FTSE 100 business from the limelight to enable it to focus on growth.

The comments from Lansdown come amid faint speculation that the company might yet attract a higher offer. The deal goes to a shareholder vote in the autumn with some analysts suggesting the deal has been priced too cheaply.

analysts at Jeffries, Investec and Shore Capital have all suggested that the bid undervalues the business.

[ochs] 20/8/2024 17:04

@CCNP are you suggesting this money has only come to light all these years later because of the due diligence related to the planned takeover? Out of interest is it a 6 figure sum?

[lomax99] 17/8/2024 09:53

They are just trying to justify selling out at a ridiculously low price, embarrassing really.

[ochs] 16/8/2024 17:42

If the board really think it would take 7 years to get to an £11 share price then they surely have no ambition and must agree with Peter H's view of Chris Hill - the whole thing gets stranger and stranger. Also the suggestion that the Consortium only wanted to proceed IF Peter agreed to hold some of the equity? Hard to believe!

[lomax99] 16/8/2024 14:54

Hope so, I will be voting against it.

[growthpotential] 16/8/2024 14:23

Hargreaves's is a poor investment for me, what has gone wrong here. It's wonder what the institutional holders will do here, will they vote the deal down(?)

[growthpotential] 14/8/2024 21:20

Can't believe this is being sold at 1140 9 years on

[ccnp] 13/8/2024 19:52

thank you.

Including a dividend of some kind as part of an offer is not uncommon and is usually to do with structuring a deal to be attractive to key investors who have forecast the income stream elsewhere

[ochs] 13/8/2024 07:28

HL website says xd 3rd Oct, with payment on 1st Nov.

What I'm not clear about is how that works in the context of the takeover when the 30p is supposed to be included in the bid price of 1,140p? Is this why the share price is remaining around £11?

[ccnp] 13/8/2024 06:49

Anyone spot the ex date for the divi?

[waldron] 13/8/2024 05:38

Hargreaves Lansdown takeover: what it means for your money

Britain’s biggest investment platform has agreed a £5.4 billion takeover. What does it mean for shareholders and customers?


By Ruth Emery
published 12 August 2024


Hargreaves Lansdown has agreed a £5.4 billion takeover by a group of private equity investors.

Following months of talks, the consortium led by CVC Capital Partners had their final offer agreed by the Hargreaves Lansdown board on Friday. The £11.40-a-share offer has been recommended to shareholders, who will be able to vote on the deal. The takeover is still subject to final shareholder and regulatory approval, but it is widely expected to be approved. As a result, the FTSE 100 company will leave the London stock market. The buyers are CVC, Sweden’s Nordic Capital, and a subsidiary of the Abu Dhabi Investment Authority.

Hargreaves Lansdown is the UK’s largest investment platform, with 1.8 million customers. In recent years, it has launched a savings marketplace called Active Savings and cut the fees on lifetime ISAs and junior ISAs. Earlier this year it gave retail investors access to primary gilt markets.


MoneyWeek magazine.


We look at what the takeover means for you, whether you’re a shareholder or a customer.

Hargreaves Lansdown was founded in 1981 by Peter Hargreaves and Stephen Lansdown. They own 26% of the shares between them.

The offer values the company at £11.40 per share and is more than 15% higher than the £9.85 per share offer made in April, which was dismissed by the Hargreaves Lansdown board as significantly undervaluing the company.

The takeover will result in a bumper payday for the billionaire founders, netting them hundreds of millions of pounds. For ordinary shareholders, the first thing to do is look out for details about the offer and vote being sent next month. There must be a 75% majority for the deal to get the final go-ahead.

If approved, shareholders will be able to transfer their stake to the new unlisted company or accept cash in exchange for their shares. Those wanting to sell their holding will get £11.10 per share in cash, plus a dividend of 30p per share, taking the total to £11.40. Shareholders who wish to retain their stake will be subject to an overall cap of 35% ownership.

It is expected that most shareholders will opt to take the cash, rather than have a holding in an unlisted company. The announcement on Friday confirmed that Hargreaves would take only 50% of his shares into the new venture, while Lansdown will sell all of his shares.


Should I sell or keep my shares?

Hargreaves Lansdown shares are easily traded at the moment because they are listed on the UK stock market. When the company goes into private hands, which is likely to happen in early 2025, you will no longer be able to sell and buy them in the same way.

Holding unlisted shares can be tricky to manage and hard to sell. If you want to offload shares you will have to find a buyer or wait until the new owners decide to sell or list the company on a stock exchange again.

Unlisted companies operate without the same reporting requirements as those on a stock market, which can make it difficult to get an accurate picture of their operations and performance. It can be difficult to value unlisted firms, and so you may not know how much your holding is worth.

We have lots more information on this topic in our article on what happens when a company delists from a stock exchange?
I’m a customer – how will it affect me?

There is unlikely to be any changes to the investment platform either now or in the early stages following the takeover.

Hargreaves Lansdown says: “It’s important to understand that the offer doesn’t have any impact on how your assets are held or managed and there is no change to the security of your assets.

“Nor are we planning any changes to any of our products, services, or to your investments and cash on our platform.”

You should be able to continue to access your account (whether it's in an ISA, savings account, pension or fund and share account), and trade investments, regardless of who owns the business.

The consortium says it has no intention of changing the location of the investment firm’s Bristol headquarters, which is where most of its 2,400 staff work. The private equity buyers praised Hargreaves Lansdown for its strong, trusted brand and its important purpose of helping people manage their financial wealth and enabling clients to get the right outcomes. However, it also said the company requires substantial investment in an "extensive technology-led transformation", in order to drive the next phase of growth and development. So, in time, the investment platform could look different in terms of its technology infrastructure and digital channels.
Is my money at risk?

Hargreaves Lansdown will continue to be regulated by the Financial Conduct Authority (FCA).

The investment platform states: “The entity which holds client assets (HL Nominee) is segregated from the business and the liabilities of the business.

“All client money is held by us on trust and is segregated from our own funds in accordance with the FCA’s client money rules and guidance.”

The FCA regulation means customers will still be able to take any complaints to the Financial Ombudsman Service. You will also continue to have protection under the Financial Services Compensation Scheme (FSCS), which covers up to £85,000 held in any firm that fails.

[waldron] 13/8/2024 05:20

Dassera
12 Aug '24 - 10:56 - 3061 of 3065
0 0 0
Plenty more here...

[ochs] 12/8/2024 12:02

I actually think HL and AJB should have considered a merger to beat of the incoming competition from the US. Charges could have been reduced due to savings in back office and IT systems - if the HL board had any ambition they'd have at least looked at this option as a way of staying independent and UK listed. AJB have a similar business model (unlike ii) and are further ahead in the advice side of things than HL.

[ochs] 12/8/2024 11:59

I don't think it's been confirmed if the rollover option shares will pay dividends - an important consideration if you're going to hold shares in a private company for a number of years.

I don't think HL have confirmed if they can be held through an HL Fund & Share account.

@Dassera, even if you buy shares now I'm not sure you'd get 100% in the rollover option - would depend on demand and you might get scaled back, but I guess you'd at least get your cash back.

[sleepy] 12/8/2024 11:30

Thanks Dassera but what does it mean in practice?

[dassera] 12/8/2024 09:56

Plenty more here...

hxxps://www.londonstockexchange.com/news-article/market-news/offer-for-hargreaves-lansdown-plc/16610825

[dassera] 12/8/2024 09:51

As an alternative to the Cash Consideration, eligible HL Shareholders may elect to participate in the Alternative Offer by exchanging some or all of their HL Shares for rollover loan notes issued by Bidco which will, subject to implementation of the Rollover, ultimately be exchanged for rollover ordinary shares in the capital of Topco having the rights of "Rollover Shares" set out in the Topco Articles (as amended from time to time) (the "Rollover Securities"), subject to the terms and conditions of the Alternative Offer (detailed in paragraph 12 below). Eligible HL Shareholders will be able to elect for the Alternative Offer in relation to some or all of their holdings of HL Shares and will receive (subject to implementation of the Rollover):

for each HL Share: 1 Rollover Security

* The financial terms of the Cash Offer and the Alternative Offer are final and will not be increased or improved, except that Bidco reserves the right to increase the amount of the Cash Consideration and improve the financial terms of the Alternative Offer if there is an announcement on or after the date of this announcement of an offer or a possible offer for HL by a third party offeror or potential offeror. Bidco reserves the right to elect to implement the Acquisition by way of an Offer as an alternative to the Scheme (with the consent of the Panel (where necessary) and subject to the terms of the Cooperation Agreement (if applicable)).





If the Scheme becomes Effective, assuming all eligible HL Shareholders validly elect to receive consideration by means of the Alternative Offer in respect of 35 per cent. of their holdings of HL Shares and no such elections are scaled back as a result of the US Holders Cap or the Shareholding Cap, following satisfaction of the Cash Consideration and subject to implementation of the Rollover, HL Shareholders will hold up to 35 per cent. of the economic rights in Topco. Following the implementation of the Rollover, Consortium JVCo will subscribe for Topco A Ordinary Shares (at the same subscription price per share as Consortium JVCo paid in respect of its subscription for Topco A Ordinary Shares to fund the payment of the Cash Consideration to HL Shareholders) for an aggregate subscription amount equal to the total costs and expenses incurred and to be incurred by or on behalf of the Topco Group and the Consortium Members in connection with the Acquisition. This issuance will be implemented on a non-pre-emptive basis in order to enable the relevant members of the Topco Group to settle such costs and expenses, meaning that holders of Rollover Securities will not be entitled to participate and their economic rights in Topco will therefore be diluted by such issuance with effect from the Costs Issuance Date. Such costs and expenses incurred and to be incurred in connection with the Acquisition are currently expected to be approximately £100 million, which would result in a limited dilution of participating HL Shareholders of up to approximately 3 per cent. of the holding of HL Shareholders who elect to receive the Rollover Securities. An updated estimate of such costs and expenses will be included in the Scheme Document.

* The financial terms of the Cash Offer and the Alternative Offer are final and will not be increased or improved, except that Bidco reserves the right to increase the amount of the Cash Consideration and improve the financial terms of the Alternative Offer if there is an announcement on or after the date of this announcement of an offer or a possible offer for HL by a third party offeror or potential offeror. Bidco reserves the right to elect to implement the Acquisition by way of an Offer as an alternative to the Scheme (with the consent of the Panel (where necessary) and subject to the terms of the Cooperation Agreement (if applicable)).

[sleepy] 12/8/2024 09:40

Has anyone seen an explanation of what shareholders get if they choose the rollover option?

[dassera] 12/8/2024 09:27

I am considering buying shares and electing for the rollover equity alternative.

Does anyone know if the delisted equity can be held via an ordinary (not ISA) Hargreaves Lansdown account?

[japatrick] 11/8/2024 18:27

I know that you clown ...figure of speech for a dithering/indecisive board

[growthpotential] 10/8/2024 20:35

I will be holding the shares and rejecting the take over offer

[con90210] 10/8/2024 10:36

To who though? I looked at II but they charge a monthly fee which is both for SIPP amd ISA holdings so seems expensive. Have started to look at AJ Bell who charge 0.45% for holdings. Any advice grateful! Am looking to move my kids Junior ISAs too.