- Paul Hargreaves’ and Stephen Lansdown’s firm now has two million customers
Two entrepreneurs who started their investment business in a spare bedroom will make around £850million when it is taken over in a £5.4billion deal.
Peter Hargreaves and Stephen Lansdown launched the firm from the former’s home in Bristol with a single phone and borrowed office equipment in 1981.
The pair, who trained as accountants, were aiming to make investing in stocks and shares more accessible to everyday savers. Hargreaves Lansdown is now the biggest DIY investment platform in the country with some two million customers.
Yesterday it agreed to be taken over by a group of private equity firms, in a move backed by Mr Hargreaves and Mr Lansdown. In a blow to the City, the FTSE 100 firm has become the latest London-listed company to be snapped up by foreign buyers.
Seventeen years after the company launched on the stock market with a valuation of more than £750million, Mr Hargreaves will make £535million from selling half of his 20 per cent stake.
Paul Hargreaves (pictured) and Stephen Lansdown set up what is now the UK’s largest DIY investment platform with 2million subscribers. The firm is now being bought out by private equity investors
The billionaire businessman, 77, is planning to retain around 10 per cent ownership of the firm after the deal.
Mr Hargreaves, a Brexit supporter who donated £3million to the Vote Leave campaign, was granted a CBE for services to business innovation, financial services and the city of Bristol in 2014.
The father-of-two stepped down as Hargreaves Lansdown chief executive in 2010 and left the business in 2015 after having a heart attack.
Mr Lansdown, 71, is expected to vote in favour of the takeover but will cash out his entire near 6 per cent stake. The Guernsey-based billionaire, who owns Bristol City Football Club and Bristol Rugby Club and also has a CBE, is set to take home around £309million.
Both founders have left the business, but as its largest shareholder Mr Hargreaves has been a vocal critic of previous management, saying they presided over ‘a shambles’ that eroded the share price.
Stephen Lansdown is expected to vote in favour of a takeover but will cash out his entire stake near six per cent for £309million
The platform was caught up in the scandal surrounding the collapse of Neil Woodford’s investment empire, having been a strong advocate of the now-disgraced fund manager.
It continued to recommend Woodford’s funds to clients right up until the day that it was suspended in 2019, leaving thousands of investors out of pocket.
A consortium of investors including Luxembourg private equity giant CVC and Abu Dhabi’s sovereign wealth fund will pay £11.40 per share for the company.
The deal will be completed next year if it gets the go-ahead from shareholders.