Hargreaves Lansdown reports record full-year AuA, consortium tables final offer

Hargreaves Lansdown posted record assets under administration and a big increase in net new business for the full-year.

The investment platform said that total assets under administration jumped by 16% to reach £155.3bn over the year ending on 30 June, while net new business flows increased by £4.2bn or 13% less than one year earlier.

That drove a 4% rise in revenues to £764.9m and a 4% increase in underlying profit before tax to £456m for underlying diluted earnings per share of 61.7p or 10% less than in the year before.

Consortium presents firm and final offer

Chief executive officer Dan Olley characterised the year as "eventful" for the company, which had culminated in a firm and final offer from a consortium of investors.

The board would recommend the offer to shareholders, he said.

"Success requires navigating a complex and broad programme of change and there is no doubt that delivery of benefits will not be linear, but we know what needs to be done and are determined to achieve it by delivering steadily and surely keeping our focus on our clients and meeting our medium to longer-term objectives," Olley said.

A consortium comprised of CVC Private equity funds, Nordic Capital XI Delta GP and Platinum Ivy tabled a final and firm offer for Hargreaves Lansdown on Friday for a cash consideration of 1,140p per share.

That amount would be comprised of 1,110p per share of Hargreaves together with a 30p per share dividend for the full financial year.

The acquisition price valued the firm's share capital at about £5.4bn, for a 54.1% premium to the share price on 11 April, the day before the initial buyout approach.

Hargreaves's shareholders could also choose to take part in the alternative offer, which would see them eventually receive shares in the new company, instead of cash.

The terms of CVC and Capital XI's offer were now final, unless a rival bid for Hargreaves Lansdown were to be announced.

"The acquisition of Hargreaves Lansdown by private equity underscores the valuation disconnect for wealth managers between public and private markets," said Christian Kent, managing director at Houlihan Lokey's FinTech Group.

"With over 25 private equity-backed wealth management firms in the UK, this move isn't surprising. Over time, we expect to see further consolidation among these firms, and with robust private equity backing, HL could emerge as a pivotal player in this consolidation through M&A activities."