Hargreaves Lansdown advanced on improved takeover pitch

Shares in Hargreaves Lansdown advanced around 5% higher on Tuesday after the stockbroker said it would be willing to accept a new cash offer priced at 1,140p per share from a consortium of investors.

The buyers consisted of private equity firms CVC and Nordic Capital, along with the Abu Dhabi Investment Authority.

The FTSE 100 stockbroker and pensions firm noted that this proposed offer follows three previous approaches from the consortium in recent months – the highest prior offer of 985p per share was rejected last month.

According to the Hargreaves board the new offer "would provide the certainty of value in cash to shareholders" and, as a result, it had decided to engage with the consortium and provide access for due diligence to be carried out.

Moreover, the board indicated to the consortium that the new bid is at a value that the board would be willing to recommend unanimously to shareholders, should a formal offer be made.

The improved offer includes a 30p final dividend, with an option for shareholders to choose ‘rollover’ equity instead of cash, to co-invest in the consortium's unlisted acquisition vehicle.

Potential hurdles remain, with a small number of large shareholders including co-founders Peter Hargreaves and Stephen Lansdown likely holding sway in any shareholder vote.

Peter Hargreaves retains around 19.8% of the company’s shares and previously expressed reservations about earlier offers.

Hargreaves, who owns about 19.8% of the company, was open to a take-private deal but not at the price of the May offer, while

Stephen Lansdown, meanwhile, holds a 5% stake and, similarly, previously questioned the value of the previous offer.

In London, meanwhile, Hargreaves shares were up 55p or 5.12% changing hands at 1,128p each.