British investment fund supermarket Hargreaves Lansdown has said it will accept a proposed offer from a trio of private equity investors, meaning another of the UK’s biggest companies will leave the FTSE 100 index.
In a stock market filing on Tuesday, the company said that the US private equity firm CVC, Denmark’s Nordic Capital and a subsidiary of the Abu Dhabi Investment Authority (ADIA) had made an offer worth £11.40 a share in cash.
It was the fourth proposed offer in recent months, Hargreaves Lansdown said. The first, revealed in May, was worth £9.85 a share.
Hargreaves Lansdown’s share price has risen by more than half since the end of February.
Its share price was up 5% on Tuesday, hitting £11.30, in response to the proposal, making it the biggest riser in the FTSE 100. The bidders have until 5pm on 19 July to make a firm offer, after the company asked for an extension to the deadline under takeover rules.
If successful, the buyout would add Hargreaves Lansdown to a long list of companies leaving the FTSE 100 index. Some UK executives and investors are concerned that London-listed companies are undervalued compared with peers in the US.
Recent departures from the FTSE 100 include the building materials company CRH, which last year shifted its main stock market listing to the US, and the Anglo-German tourism company Tui, which voted to move its main listing from London to Frankfurt earlier this year.
The Bristol-based Hargreaves Lansdown pioneered the business of selling units of investment funds online. At the end of March it administered £150bn in assets for 1.86 million clients.
However, the company’s share price has struggled in recent years, with analysts concerned about rising costs and risks relating to a major investment plan. The private equity offer values Hargreaves Landown at just over half of its 2019 peak.
Its billionaire founders, Peter Hargreaves and Stephen Lansdown, are still major shareholders, with stakes that would be valued at £1.07bn and £308m respectively if they were to sell, according to analysis of data from S&P Global Market Intelligence.
Shareholders will also be able to continue to hold their investments in the unlisted company if the sale goes ahead.
The company said that it “remains confident in management’s ability to execute Hargreaves Lansdown’s strategic priorities” and in the company’s “fundamental longer-term prospects”, but added that the board would be “willing to recommend” an offer at the new offer price.
