Hargreaves Lansdown has announced that it is recommending a cash offer for the company at 1140 pence per share. The bidder is Harp Bidco Limited, which is backed by CVC Private Equity Funds, Nordic Capital XI Delta, SCSp (acting through its general partner, Nordic Capital XI Delta GP SARL) and Platinum Ivy B 2018 RSC Limited.
30p of the 1140p valuation comes as a dividend to be paid no later than end November 2024.
At this price, the bid values the company at £5.443bn. 1140p is a premium of 54.1% to the price of 740p on 11 April 2024 (before the initial approach to the board). Some shareholders will be able to roll some or all of their interest into the eventual holding company.
Lindsell Train (the management company, not the trust) has a 12.8% stake in Hargreaves Lansdown. At 30 June 2024, it accounted for 5.5% of Finsbury Growth & Income’s NAV. The offer price is only modestly higher than the share price at 30 June(1132p) and so the uplift on the end June NAV is modest – the main benefit of the bid was captured in the trust’s end May NAV. Sadly, the positive effect of this was more than offset by the collapse in the value of the trust’s stake in Burberry. Finsbury Growth and Income is the only UK equity income trust with a negative NAV return over the past 12 months.
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