Hargreaves Lansdown Co-Founder Questions Takeover Price Fairness

The co-founder of Hargreaves Lansdown, Stephen Lansdown, has expressed doubts about the fairness of the £5.4 billion agreed bid price for the UK’s largest DIY investment platform. While he believes the offer is “fair” compared to previous bids, he questions whether it truly represents the right value for the company.

Lansdown’s comments come amidst speculation that Hargreaves Lansdown might attract a higher offer, with some analysts suggesting the current deal has been priced too cheaply. On 9 August, the board recommended shareholders accept the £11.10 per share take-private offer from a consortium consisting of private equity groups CVC, Nordic Capital, and the buyout arm of the Abu Dhabi Investment Authority.

The final offer price represents a 54 per cent premium over the undisturbed share price before the consortium’s initial approach in April. The company has stated that this offer enables shareholders to realise “an immediate and certain” value for their shares.

Lansdown, who is set to receive £309 million in cash for his 5.7 per cent stake, believes the deal will give the company a new lease of life and the ability to make decisions without the constant scrutiny that comes with being a publicly-listed entity. He acknowledges that while he is not exceptionally happy with the offer, it suits the company’s needs and represents a good move for its future growth.

Despite several shareholders, including co-founder Peter Hargreaves, providing “irrevocable undertakings” to accept the offer, these undertakings would lapse if a competing offer were made and recommended by the board. The deal is subject to shareholder approval, Financial Conduct Authority approval, and court approval, with the first documents expected by 9 September.

Lansdown expressed disappointment with Hargreaves Lansdown’s performance in recent years, citing poor decisions made by the previous board. However, he remains optimistic about the company’s future under new leadership.

As of Tuesday’s close, Hargreaves Lansdown shares were trading at £11.02, just below the offer price, indicating that traders are sceptical about the emergence of a rival bid. Nonetheless, analysts from Jefferies, Investec, and Shore Capital have suggested that the current bid undervalues the business.

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