Deadline extended for Hargreaves Lansdown takeover talks

Talks over a possible buyout of one of the UK’s leading investment houses, Hargreaves Lansdown, have been extended until Friday.

The company has told shareholders “discussions are ongoing” with a group of investors keen to buy the FTSE 100 finance firm.

Hargreaves Lansdown (HL) employs about 2,400 people, most of whom work in its flagship offices on Bristol’s harbourside.

The buyout bid is being led by takeover specialists CVC, backed by a group of private equity investors including Platinum Ivy, which is owned by the Abu Dhabi Investment Authority.

CVC owns more than 130 businesses across a huge range of sectors, from the Rugby Six Nations and La Liga to pharmaceuticals, food and consumer brands.

Experts believe it is unlikely the new potential owners, if successful, would move the firm.

Ben Yearsley, who was a senior executive at HL and now works for Fairview Investing, said he “can’t see any threat” to the business in Bristol.

He said: “I don’t see any benefit in moving it elsewhere. There are plenty of benefits from being a UK business, and the expertise of HL is its staff.

“Why would you risk that?”

The firm was founded in 1981 by Peter Hargreaves and Stephen Lansdown, using a spare bedroom in Mr Hargreaves’ house and a couple of borrowed desks.

Today it has 1.8 million customers who invest their savings and pensions with the company. In all, HL manages £1.55bn for their clients.

In the 1980s the two founders wrote newsletters to their clients, advising them of rising funds and investment tips.

The firm now has a high-tech online investment platform where customers can trade shares, monitor their pensions and more.

The company first floated on the London Stock Exchange in 2007, and rose to become a regular on the FTSE 100 index. Dozens of members of staff who grew up within the company became millionaires through company share options.

The buyout group offered £5.4bn for Hargreaves Lansdown in June, which the board said it was happy to recommend to shareholders.

“It looks cheap,” commented Ben Yearsley of Fair Investing.

“The scale, the quality of the business, the cashflow, the profits, everything is healthy.

“There are record assets under management. We all have to save for our futures, so it’s a vital business, and it’s worth more than that,” he added.

Peter Hargreaves still owns 20% of HL shares, while Stephen Lansdown has about 6%, after selling shares to raise money for his beloved Bristol City FC and other sporting interests in his home city.

It is thought, if the bid is successful, the two founders would “rollover” their shares into the new privately-owned firm, as they are allowed to do.

Most institutional investors would have to sell, and small shareholders like staff members would have the choice of taking a payout, or joining the founders for the next chapter.

The official London Stock Exchange Takeover Panel has given the group until 17:00 BST on Friday to make a formal offer. There will then be several weeks of detail and negotiation until shareholders are invited to vote on the deal.

Hargreaves Lansdown’s bosses have not commented on the sale talks. Under official rules, they cannot make any public comment.

The firm’s only official statement said: “There can be no certainty that a firm offer will be made for Hargreaves Lansdown nor as to the terms on which any such firm offer might be made.”