Hargreaves Lansdown has said it is ready to recommend a takeover to its shareholders after a group of private equity bidders led by CVC rounded again with a fourth £5.4bn offer for the firm.
In a statement to the market this afternoon, the retail investment giant said the latest non-binding offer was at a value that “the board would be willing to recommend unanimously to Hargreaves Lansdown shareholders” and it had now entered negotiations with the consortium.
“The board remains confident in management’s ability to execute Hargreaves Lansdown’s strategic priorities and in Hargreaves Lansdown’s fundamental longer term prospects,” Hargreaves Lansdown said in a statement.
“However, having evaluated the revised possible cash offer, which would provide the certainty of value in cash to shareholders, the Board has decided to engage with the Consortium and provide confirmatory due diligence access.”
The group of bidders is led by buyout giant CVC, alongside Nordic Capital, and Platinum Ivy, a wholly-owned subsidiary of the Abu Dhabi Investment Authority.
The latest bid comes in at 1,140p per share. A deadline for a firm bid for the takeover has now been extended until 5pm on the 19th July.
Shares in the company surged around five per cent on news of the bid today.
Hargreaves, the UK’s biggest retail investment platform with a 40 per cent share of the market, has rejected three previous bids but the opening of talks could now signal an impending takeover of the FTSE 100 company.
Any deal would be a major blow for the London Stock Exchange as it looks to stem an exodus of companies away from the market. Over £100bn worth of businesses have now exited the market this year either through takeover or de-listings.
Fears have grown that listed businesses are systemically undervalued in the UK compared to public markets in the US. The initial bid for Hargreaves Landsown came in at a 30 per cent premium on its trading price but shares have rocketed some 40 per cent since then.