UK's Hargreaves Lansdown agrees $6.9 bln takeover by consortium
Shareholders to get 11.40 pounds per share in cash
Consortium says offer is final
Deal has backing of co-founders
Adds more detail, context, analyst comment
By Yadarisa Shabong and Yamini Kalia
Aug 9 (Reuters) -Britain's largest investment platform Hargreaves Lansdown HRGV.L on Friday agreed to a 5.4 billion pound ($6.9 billion) takeover by an international consortium, which is betting on grabbing market share in the competitive UK wealth market.
The deal is the second largest by value struck this year by a London-listed company and is the latest in a string of takeovers of British companies.
It has the backing of co-founders and top shareholders Peter Hargreaves and Stephen Lansdown, who founded the company in 1981 and listed it in London in 2007.
The consortium, consisting of Europe's largest private equity firm CVC Capital Partners CVC.AS, Abu Dhabi's sovereign wealth fund and Swedish private equity firm Nordic Capital, said the 11.40 pounds per share cash offer was final.
The buyers said in a statement that a "substantial transformation" of the company was required, including investment in technology, to keep up with rivals after its growth had lagged some competitors.
"Whilst this is not a huge price, it looks to reflect the investment required," Peel Hunt analysts said in a note.
Shares in FTSE 100-listed Hargreaves Lansdown rose 2% to 11.02 pounds in early trade. As of Thursday's close, they had gained about 10% since the takeover approach was made public in May.
Co-founder Hargreaves plans to re-invest half of his 19.8% stake in the private company and will bank the remaining 535 million pounds, according to Reuters calculations. Lansdown stands to make 309 million pounds.
Britain's wealth market has seen competition intensify in recent years, with international financial groups muscling into the market and increased focus on wealth management by some UK retail banks, insurers and asset managers.
U.S. investment giant Vanguard, for example, has been expanding its UK Personal Investor platform, and U.S. retail trading platform Robinhood HOOD.O launched in Britain in March.
Plans by the buyers to invest in Hargreaves Lansdown's technology platform, along with any price cuts, could improve its competitive position, RBC analysts said in a note, while adding it was unclear how the investment would be funded.
Investors in Hargreaves Lansdown are being offered an alternative to the cash offer, with the option to rollover their shares into a stake in the private company.
Not all investors are able to hold shares of an unlisted company, potentially excluding some existing shareholders.
Hargreaves Lansdown, which had rejected a 985 pence per share proposal from the consortium in May, also reported annual adjusted pretax profit of 456 million pounds, beating analysts' average estimate of 428 million pounds, according to LSEG data.
Net new business was down 13% year-on-year at 4.2 billion pounds.
Hargreaves Lansdown was the largest UK-based investment platform in Britain by assets as of March, just behind the overall leader, Netherlands-based Aegon, according to Fundscape data.
($1 = 0.7843 pounds)
Reporting by Yamini Kalia and Yadarisa Shabong in Bengaluru, Iain Withers and Anousha Sakoui in London; Editing by Rashmi Aich and Mark Potter
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.