Investment platform Hargreaves Lansdown (HL) has rejected a £5bn takeover bid from a private equity consortium.

Bristol-based HL is one of the UK’s biggest direct to consumer investment platforms with £150bn in assets under administration and 1.858m active clients (April 2024 figures).

The company has been approached by a private equity consortium but has turned down the offer, it said today.

In a Stock Exchange statement HL said: “The board confirms that it unanimously rejected the proposal on the basis it substantially undervalues Hargreaves Lansdown and its future prospects.”

HL says the consortium’s latest indicative approach at 985p a share is the third made so far and another approach or offer is possible.

The consortium comprise CVC Advisers Limited, Nordic Capital XI Delta, SCSP (acting through its general partner Nordic Capital XI Delta GP SARL), and Platinum Ivy B 2018 RSC Limited, a wholly-owned subsidiary of the Abu Dhabi Investment Authority.

HL’s board says it is focusing on its strategy and expects to update shareholders with full year results on 9 August.

In the meantime, it has advised shareholders to take no action.

Under the takeover code the consortium must either announce a firm intention to make an offer for Hargreaves Lansdown under Rule 2.7 of the Code or announce that it does not intend to make an offer by 5pm on 19 June.

HL says there is “no certainty” that any firm offer will be made.

Hargreaves Lansdown has seen a number of changes to its senior management team in recent times and has also faced criticism for poor share price performance. 

Alison Platt replaced Deanna Oppenheimer as chair of the board in February after Ms Oppenheimer unexpectedly quit in November after activist investors threatened to vote against her re-appointment at the December AGM.

Some investors were unhappy with the firm’s share price performance in recent years, including one of HL's founders, Peter Hargreaves. Deanna Oppenheimer served as chair for six years during which time the share price fell from a peak of 2,419p in May 2019 to 706p by the time she quit.

HL’s share price has soared this week from 895p to 1,139p this morning although this is less than half of its peak in May 2019.