The board of Hargreaves Lansdown PLC announced Tuesday its willingness to recommend a sweetened £5.4 billion ($6.9 billion) takeover bid from a consortium of private equity firms, including CVC and Abu Dhabi's sovereign wealth fund.

Enhanced Cash Offer for Shareholders

The digital wealth manager, which aids retail investors in trading shares and funds, highlighted that the revised cash offer "would provide the certainty of value in cash to shareholders." The consortium proposes 1,140 pence per share for Hargreaves Lansdown shareholders, including a 30 pence dividend for the 2024 financial year. This offer raises the company's valuation to £5.4 billion, surpassing the previously rejected £4.7 billion bid in May.

Hargreaves Lansdown Backs £5.4B CVC: Rollover Equity Alternative

Shareholders of Hargreaves Lansdown have the option of a rollover equity alternative, allowing them to convert their shares into the consortium's unlisted acquisition vehicle. This proposal, however, is contingent upon the consortium completing its due diligence and reaching definitive terms.

Deadline and Conditions

The consortium faces a Wednesday deadline to make a firm offer or withdraw under the U.K.'s Takeover Code. Hargreaves Lansdown emphasized the uncertainty of a firm offer being made or the terms it might entail. The Bristol-headquartered company noted, "As a result, there can be no certainty that any firm offer will be made for Hargreaves Lansdown, nor as to the terms on which any firm offer might be made."

Hargreaves Lansdown Backs £5.4B CVC : Market Reaction

Shares of Hargreaves Lansdown, listed on London's blue-chip FTSE 100 index, climbed 5.12% to 1,128 pence on Tuesday, up from 1,073 pence at Monday's close. The bidding consortium includes CVC Capital Partners' London office, European private equity firm Nordic Capital, and the Abu Dhabi Investment Authority. The companies have not yet responded to requests for comment.

Hargreaves Lansdown Backs £5.4B CVC : Financial Advisers

Financial advice for Hargreaves Lansdown is being provided by Fenchurch Advisory Partners, Barclays Bank PLC, and Deutsche Numis. Morgan Stanley & Co. International PLC is advising the company's board.