Hargreaves Lansdown takeover agreed - around 5.4Bn

analystfish

Just read the news HL have accepted a private equity take over.

"Hargreaves Lansdown has agreed a £5.4bn takeover by private equity suitors that will give hundreds of millions of pounds to its billionaire founders and result in the investment supermarket becoming the latest company to leave the London stock market.

Board members of the FTSE 100 company recommended the £11.40-a-share offer, which requires shareholder approval."

As a HL customer, I am interested to see where this will go. Mainly if the new owners may do more to be competitively priced.

All my holdings are in ETF's and within an ISA so the fee's are not too bad being capped at 45 a year. I have been on the edge of moving over to T212 for a year or so now but HL's customer support is really great being able to pick up the phone and chat through any questions or issues has kept me for the moment.

When I set up my T212 account in prep for the move I could only email and it took a few days for a reply.

Interested to see what other customers or people in general make of this?

Hoenir

In general you pay for what you get. If you only require only basic services and little support then the cheapest on offer is fine. 

VXman

Hoenir said:

In general you pay for what you get. If you only require only basic services and little support then the cheapest on offer is fine. 

Tell that to St James customers.

eskbanker

VXman said:

Hoenir said:

In general you pay for what you get. If you only require only basic services and little support then the cheapest on offer is fine. 

Tell that to St James customers.

But SJP customers will buy on service rather than price, and threads about them often result in a vigorous defence of the value they're perceived to add.  I'm certainly not claiming that they offer value for money but agree with the principle that cheapest isn't necessarily best, especially for those looking for more support than others, and likewise HL's service proposition does seem to be appreciated by many, including OP....

Bostonerimus1

When I see "private equity", my prejudices make me worry for H&L and their customers.

sheslookinhot

Bostonerimus1 said:

When I see "private equity", my prejudices make me worry for H&L and their customers.

Yip, the private equity investors will do the best, before anyone else.

lr1277

I was under the impression the private equity playbook was to get the target company to take on as much debt as possible and that money was paid to the new PE owners. I imagine in a way that incurred a minimum of tax for both the company and its new owners.

Then the target company has to raise its prices to pay off the debt. So as a customer you get higher prices but not necessarily better service.

I thought this was the model for the PE takeover of the AA.

Or I might be behind the times on how PE now works.

kempiejon

As a customer and a shareholder I worry it won't go well for me.
My HL shares have been taken over at what I think is a bargain level, PE must have thought the same thing. I would have preferred to keep my ownership of the company rather than being forced to sell to PE at a discount.
As a customer, as others have, said private equity firms are in it to make a profit, could cut quality and services and increase costs will also piling on debt. Thames water anyone?

Hoenir

VXman said:

Hoenir said:

In general you pay for what you get. If you only require only basic services and little support then the cheapest on offer is fine. 

Tell that to St James customers.

Same principle applies though. Some people want more than an app to day trade with. 

granta

I'm wondering whether the recent rounds of pretty generous transfer cashback offers from HL will now end if they've achieved the desired level of inflows pre-sale to private equity?

I plan to stay with them for now given the capped fee and good customer service but be interested to see how the sale affects standards.

eskbanker

PE is undoubtedly all about increasing profitability, but increasing prices and/or reducing service quality can have the opposite effect, so they'll be well aware of the need to have a plan that avoids too much customer attrition....