Hargreaves Lansdown has accepted a £5.4bn takeover bid from a private equity consortium.
The newly formed consortium - Harp Bidco - comprises CVC Advisers, Nordic Capital XI Delta, SCSP, and Platinum Ivy, a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA).
Hargreaves Lansdown directors intend to unanimously recommend shareholders to vote in favour of the scheme and, if agreed, the acquisition is expected to complete during the first quarter of 2025.
Following the acquisition, Bidco says it plans a "substantial transformation" of Hargreaves Lansdown to "give more retail investors in the UK access to the tools, information and services required to make sound investment decisions, combined with a transparent approach and good value in line with Consumer Duty".
In particular, the consortium plans to invest in the platform's technology, digital channels, client journeys and financial products.
Alison Platt, chair of Hargreaves Lansdown, said: "HL is on an important journey to transform the saving and investing experience for clients and make it easy to save and invest for a better future.
"While the independent HL board has been pleased with the progress made by the new management team, the independent HL board believes that the cash offer represents an attractive opportunity for HL 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, and therefore intends to unanimously recommend HL shareholders vote to approve it.
"We are pleased to see that the consortium is aligned that HL has an important purpose making it easy for the UK consumer to save and invest for a better future."
Pev Hooper, managing partner at CVC Private Equity Group, Emil Anderson, Partner at Nordic Capital Advisors, and Hamad Shahwan Aldhaheri, executive director of the Private Equities Department at ADIA, said: "HL has an important purpose: to make it easy for people to save and invest for a better future. Over the 40 years since it was founded, HL has built a strong, trusted brand, underpinned by high levels of customer loyalty and advocacy. As a consortium, we are aligned with management that, despite these strengths, the company now requires substantial investment in an extensive technology-led transformation to improve HL's proposition and resilience, and to drive the next phase of HL's growth and development.
"The consortium brings extensive experience in supporting businesses undergoing transformation, and its members have long records of investing in regulated financial services companies to build better businesses and create better customer experiences.
"We look forward to partnering with HL's management to accelerate its transformation plan - including investment in technology infrastructure, digital channels, and service enhancement - all with client value, service, speed of innovation, and HL's clear purpose at the core."
