As a result, the firm will be removed from the London Stock Exchange and investors will receive a payout – if the majority of shareholders agree to the proposals.
The offer will see shareholders paid 1,110p per share, plus a full-year dividend of 30p per share, meaning investors will receive ￡11.40 for each share they own.
While the date of the vote is not yet known, the board of Hargreaves Lansdown, which unanimously recommends investors back the deal, predicts shareholders will see their payout in the first quarter of 2025.
But what does this mean for customers of the platform? And should shareholders join the co-founders in backing the deal? Here’s what you need to know. Jump to:
The acquirers of the platform are a private equity investment consortium under the banner of a newly established company called Harp Bidco. This company is owned by CVC Private Equity Funds, Nordic Capital and Platinum Ivy.
CVC Private Equity Funds comes under the wider Amsterdam-listed CVC Capital Partners banner, which owns stakes in a raft of companies, including watchmaker Breitling, and Lipton, owner of PG Tips. The firm also has partnerships with the Six Nations and Premiership Rugby, Spanish football league LaLiga and the Women’s Tennis Association.
Stockholm-headquartered Nordic Capital holds stakes in financial adviser Ascot Lloyd and bakery Ole & Steen, while Platinum Ivy is a subsidiary of Abu Dhabi’s sovereign wealth fund.
Harp Bidco has further stated it supports the “important role” the platform plays in “promoting savings and investing in society”.
Its intention in acquiring the firm is to transform its technology platform to offer a more user-friendly service and a range of financial products.
The platform will continue to be regulated by the Financial Conduct Authority and is protected by the Financial Services Compensation Scheme, which guarantees consumers up to ￡85,000.
Will Hargreaves Lansdown continue to exist?
Yes - the consortium has made clear it values the brand of Hargreaves Lansdown, so is extremely unlikely to change this.
What is the forecast for Hargreaves Lansdown?
According to the offer document, Hargreaves Lansdown has five strategic priorities for the coming years: transform the investing experience in favour of simplicity over jargon; make the most of technological advancements and its employees; use its size to benefit the client proposition; invest in the business; attract top talent.
On a financial level, broker Shore Capital says the platform has “high-quality earnings” and is a “FTSE 100 business with a dominant position in [its] market”, which will continue to grow.
I’m a Hargreaves Lansdown shareholder – what does the deal mean for my shares?
Shareholders in Hargreaves Lansdown will receive a range of documents explaining the offer in detail, which will provide a fuller understanding of the deal.
For now, your shares remain yours to sell into the markets if you so choose. At the time of writing, the share price stands at 1100p, which is less than the 1140p guaranteed by this deal, if it is approved.
While there is no guarantee of the deal being passed, with unanimous recommendation from the board and both co-founders also backing the offer, it is widely expected to be approved.
Do I get to vote on the deal?
Shareholders will receive a vote proportional to the amount of shares they own, and can choose to vote in favour, vote against, or abstain from the poll. There is no obligation to vote.
What is the alternative offer?
Alongside the cash offer, investors are able to swap their shares for an investment in Topco, which will be the unlisted vehicle that owns Hargreaves Lansdown, if the deal is approved.
Investors are being offered the option to swap one share for one “rollover security”, which would provide a continued stake in the platform.
As yet, details aren’t fully known about this option, with more clarity due in the scheme document.
A total of 35pc of the Topco is eligible for retail investors to purchase, although the shares will have no voting rights.
Investors will also take on ￡100m of costs to acquire the company and establish the Topco, meaning investors will immediately take a 3pc hit when purchasing these shares.
Shareholders should also note that this investment is extremely unlikely to be Isa eligible, and will likely have to be held in a general investment account (GIA).
What is happening to the Hargreaves Lansdown share price?
The share price has risen 2pc on today’s news, as the markets now know the shares are likely to be guaranteed at a price of 1,140p per share.
Year-to-date, the share price has risen 54pc, with the gains largely attributed to this offer being made public.
The current offer of 1,140p per share is significantly below the peak share price of the firm, which stands at 2,213p per share, achieved in 2019.