Mark Kleinman: Sky News’ City Editor, delves into the Hargreaves Lansdown takeover, The Daily Telegraph auction, and London’s capital markets efforts
Hargreaves Lansdown Deal Presents Dilemma for Retail Investors
What would Hargreaves Lansdown think of its own takeover deal? If the retail investment platform could voice its opinion, it might not be thrilled with the price at which it is being acquired by a group of private investors.
At £11.40 per share, the offer comes as a disappointment to its founders, who are reflecting on the six-year tenure of Chris Hill, the former CEO. By the time the CVC Capital Partners-led bid emerged in May, the company’s valuation had plummeted nearly 75%, significantly down from the £24 per share it commanded in 2019.
Peter Hargreaves, co-founder, is personally losing a substantial amount—£500 million, which constitutes half of his 19.8% stake. Close associates say he is “extremely disappointed” with the buyout price.
Rather than persuading Hargreaves to maintain his stake to support the consortium’s bid, reports suggest that it was the other way around: Hargreaves needed to retain some interest to convince CVC and its partners to proceed. This makes sense given that he is both the company’s largest shareholder and a major client.
Hargreaves Lansdown’s chairman, Alison Platt, reportedly informed major shareholders that the offer price might not be seen again for up to seven years if the company remained independent.
Given this, it’s not surprising that Platt and her team have endorsed the offer.
Shareholders may find the option to rollover their stakes into the bid vehicle appealing, especially if they do not require immediate cash. With potential for a revamped digital experience, improved marketing, and more competitive pricing, the company could regain its competitive edge against rivals like AJ Bell.
Such a transformation might be more effectively managed away from the public markets, though it carries its own risks. For shareholders who remain invested, the potential rewards could be significant.
Read more: Will private equity target AJ Bell, M&G, or River Global following the Hargreaves Lansdown acquisition?
Digital Doug or Flintstone?
Sir Douglas Flint, chair of the beleaguered fund manager Abrdn and early-stage science investor IP Group, has another critical assignment: leading the Digitisation Taskforce to modernize outdated capital markets infrastructure.
Recent concerns have emerged regarding Flint’s final report, which could potentially undermine the push to modernize share registration and ownership systems in the UK.
A letter from City trade associations, which I’ve reviewed, expresses anxiety about Flint’s findings. It stresses the importance of transitioning to a unified and modern system to keep the UK competitive and prevent capital flight.
While modernization is costly and complex, the need for bold reforms has never been more pressing. The UK’s capital markets face increasing competition as listings are attracted to rival exchanges in Europe and the US.
Flint’s final report will determine whether he earns the moniker ‘Digital Doug’ or if he is more fittingly called Flintstone.
Read more: Abrdn reports net inflows as it prepares to appoint a new chief
For Saatchi, Bidding Isn’t Working
Lord Saatchi, the Tory peer known for his ‘Labour isn’t working’ campaign, has been excluded from the auction for The Daily Telegraph. His £350 million bid for the newspaper and The Spectator fell short of others in the initial round, with Mediahuis also eliminated.
This leaves some uncertainty about the remaining bidders, especially since Daily Mail owner Lord Rothermere has publicly withdrawn, and Sir Paul Marshall seems focused on The Spectator.
David Montgomery, a veteran in the newspaper industry, is still in contention but faces the challenge of raising most of the required funds from public shareholders. Former chancellor Nadhim Zahawi has put together a fully financed £600 million offer.
That leaves two serious bids, though with Axel Springer and Rupert Murdoch’s News UK not involved, the remaining contenders appear to be investment groups rather than strategic bidders. The situation remains dynamic.
Read more: Boris Johnson considered for Telegraph editor role amid bidding warSource link
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Mark Kleinman: Sky News’ City Editor, delves into the Hargreaves Lansdown takeover, The Daily Telegraph auction, and London’s capital markets efforts
Hargreaves Lansdown Deal Presents Dilemma for Retail Investors
What would Hargreaves Lansdown think of its own takeover deal? If the retail investment platform could voice its opinion, it might not be thrilled with the price at which it is being acquired by a group of private investors.
At £11.40 per share, the offer comes as a disappointment to its founders, who are reflecting on the six-year tenure of Chris Hill, the former CEO. By the time the CVC Capital Partners-led bid emerged in May, the company’s valuation had plummeted nearly 75%, significantly down from the £24 per share it commanded in 2019.
Peter Hargreaves, co-founder, is personally losing a substantial amount—£500 million, which constitutes half of his 19.8% stake. Close associates say he is “extremely disappointed” with the buyout price.
Rather than persuading Hargreaves to maintain his stake to support the consortium’s bid, reports suggest that it was the other way around: Hargreaves needed to retain some interest to convince CVC and its partners to proceed. This makes sense given that he is both the company’s largest shareholder and a major client.
Hargreaves Lansdown’s chairman, Alison Platt, reportedly informed major shareholders that the offer price might not be seen again for up to seven years if the company remained independent.
Given this, it’s not surprising that Platt and her team have endorsed the offer.
Shareholders may find the option to rollover their stakes into the bid vehicle appealing, especially if they do not require immediate cash. With potential for a revamped digital experience, improved marketing, and more competitive pricing, the company could regain its competitive edge against rivals like AJ Bell.
Such a transformation might be more effectively managed away from the public markets, though it carries its own risks. For shareholders who remain invested, the potential rewards could be significant.
Read more: Will private equity target AJ Bell, M&G, or River Global following the Hargreaves Lansdown acquisition?
Digital Doug or Flintstone?
Sir Douglas Flint, chair of the beleaguered fund manager Abrdn and early-stage science investor IP Group, has another critical assignment: leading the Digitisation Taskforce to modernize outdated capital markets infrastructure.
Recent concerns have emerged regarding Flint’s final report, which could potentially undermine the push to modernize share registration and ownership systems in the UK.
A letter from City trade associations, which I’ve reviewed, expresses anxiety about Flint’s findings. It stresses the importance of transitioning to a unified and modern system to keep the UK competitive and prevent capital flight.
While modernization is costly and complex, the need for bold reforms has never been more pressing. The UK’s capital markets face increasing competition as listings are attracted to rival exchanges in Europe and the US.
Flint’s final report will determine whether he earns the moniker ‘Digital Doug’ or if he is more fittingly called Flintstone.
Read more: Abrdn reports net inflows as it prepares to appoint a new chief
For Saatchi, Bidding Isn’t Working
Lord Saatchi, the Tory peer known for his ‘Labour isn’t working’ campaign, has been excluded from the auction for The Daily Telegraph. His £350 million bid for the newspaper and The Spectator fell short of others in the initial round, with Mediahuis also eliminated.
This leaves some uncertainty about the remaining bidders, especially since Daily Mail owner Lord Rothermere has publicly withdrawn, and Sir Paul Marshall seems focused on The Spectator.
David Montgomery, a veteran in the newspaper industry, is still in contention but faces the challenge of raising most of the required funds from public shareholders. Former chancellor Nadhim Zahawi has put together a fully financed £600 million offer.
That leaves two serious bids, though with Axel Springer and Rupert Murdoch’s News UK not involved, the remaining contenders appear to be investment groups rather than strategic bidders. The situation remains dynamic.
Read more: Boris Johnson considered for Telegraph editor role amid bidding war
Source link