The Daily Telegraph - Saturday
Trading pioneers land £800m after sale of Hargreaves Lansdown
TRADING pioneers Peter Hargreaves and Stephen Lansdown are in line for an £800m payday after selling the business they founded in a spare bedroom in Bristol more than 40 years ago.
The two men, who co-founded Britain’s biggest share trading platform Hargreaves Lansdown in 1981, have backed a takeover of the business by European and Middle Eastern investors.
Mr Hargreaves, 77, has agreed to sell half his stake in the business for cash to the consortium, composed of big money investors CVC Capital, Nordic Capital and Abu Dhabi’s sovereign wealth fund.
The sale will make him £534m. He will also remain a key figure at the group having agreed to roll over the rest of his shares into a new ownership structure backed by the consortium. Mr Lansdown, 71, will sell all his shares for cash, netting him around £309m.
Hargreaves’ board of directors, led by Alison Platt, backed the 1,110p per share offer, which values the FTSE 100 business at £5.4bn. Shareholders are also set to receive a 30p dividend per share. The board said the company, which employs 2,000 people, needed more spending on IT upgrades and going off the stock market was the best option.
If the deal goes through it will mark the end of a 17-year period on the public markets for the business, which has sought to position itself as a champion of retail investors.
The takeover is likely to be regarded as another blow for the London Stock Exchange after a string of other major companies shifted their listings to the US or were taken private.
Hargreaves Lansdown was founded at Mr Hargreaves’ home in the Bristol suburb of Clifton and is still based nearby. Having prospered from the 1980s stock market boom during the Thatcher years, the pair grew the company into middle England’s favourite share trading platform with nearly 2m customers. They made a significant sum when they floated the business on the London stock market in 2007.
Both men have stepped back from the business in recent years, although Mr Hargreaves has remained a constant presence, criticising previous management for a share price slide and underperformance. Mr Lansdown has pursued his sporting interests, buying significant stakes in Bristol’s rugby team Bristol Bears and Bristol City FC.
Ms Platt said the cash offer “represents an attractive opportunity for Hargreaves Lansdown shareholders to realise an immediate and certain cash value for their investment at a level which may not be achievable until the execution of the strategy is delivered over the medium to longer term”.
In an unusual move, shareholders can choose cash for their shares or a stake in the CVC-backed vehicles which will run the business. The structure has prompted criticism and is seen as a mechanism to win Mr Hargreaves’ support for the deal because of his desire to remain invested in the company.
The board recommended that other investors take the cash instead of staying investors.