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ADIA group raises offer for UK stock trading platform

ADIA Hargreaves Lansdown Alamy/Gajendra Bhati
ADIA subsidiary Platinum Ivy has teamed up with private equity firms CVC and Nordic Capital to buy Hargreaves Lansdown
  • Hargreaves Lansdown valued at $6.9bn
  • CVC and Nordic Capital joint bidders
  • July 19 bid deadline

A consortium including Abu Dhabi’s biggest sovereign wealth fund is poised to buy stock trading platform Hargreaves Lansdown after making an improved non-binding offer for the British company.

Abu Dhabi Investment Authority’s (ADIA) wholly owned subsidiary Platinum Ivy has teamed up with private equity firms CVC and Nordic Capital to offer £11.40 ($14.51) per share for Hargreaves Lansdown.

That price values the company at £5.4 billion ($6.9 billion), according to AGBI calculations.

ADIA is the world’s eighth largest sovereign wealth fund with assets under management of $968 billion, according to Global SWF, and has done various deals with CVC.

The pair are major shareholders in Dutch accounting company TMF Group and Florida’s Fidelis Insurance. ADIA also bought a 30 percent stake in appliance warranty company Domestic & General from the private equity firm in 2019.

Matt Turner, CVC’s senior managing director in New York, previously worked for ADIA from 2018 to 2022, according to his LinkedIn profile.

Improved offer

In May, Hargreaves Lansdown’s board rejected the consortium’s previous offer of £9.85 per share, stating that this “substantially undervalues” the company “and its future prospects”.

The board will recommend unanimously that shareholders accept the improved offer price should the consortium make a “firm” bid, the company said in a statement to the London Stock Exchange.

The deadline to submit such a bid is July 19. ADIA declined to comment when contacted by AGBI.

The latest non-binding offer is the consortium’s fourth and its interest helped Hargreaves Lansdown’s shares rebound to £11.22 in early Wednesday trading, up from £6.94 on March 19. Yet the stock is still down 41 percent over the past five years despite the recent rally.

Founded in 1981 by Peter Hargreaves and Stephen Lansdown, the investment platform had £150 billion of assets under administration as of March 31 and 1.9 million active clients.

Its first quarter revenue was £200 million, up 6 percent year on year. Its client base expanded and its monthly share dealing volumes grew 3 percent over the same period, according to AGBI calculations.

Simply Wall St gives Hargreaves Lansdown a fair value of £12.31 per share, implying the stock is about 9 percent undervalued although it trades at a price-to-earnings ratio of 17.7. That compares with 15.6 and 15.3 for rivals Man Group and Schroders respectively.

Hargreaves Lansdown made a net profit, or earnings, of £302 million in 2023 on revenue of £753 million, Simply Wall St data shows.

Analysts forecast Hargreaves Lansdown’s revenue will increase over the next two years. Profit growth is expected to be more tepid, which likely reflects stiffening competition among online trading platforms. More recently established rivals such as eToro and Robin Hood are proving especially attractive to younger investors, they said.

Hargreaves Lansdown’s dividend yield of 3.7 percent is above the industry average of 3 percent, Simply Wall St estimates.

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