By Amy-Jo Crowley
LONDON (Reuters) -Peter Hargreaves, the biggest shareholder in UK retail investment platform Hargreaves Lansdown, is open to taking the company private and has held talks with investors recently about a transaction, three people familiar with the matter told Reuters.
Hargreaves Lansdown said on Thursday it rejected a 4.67 billion pound ($5.95 billion) takeover proposal from a consortium led by CVC Advisers and the Abu Dhabi Investment Authority, saying it "substantially" undervalued its prospects.
The approach from the consortium proposed a price of 985 pence a share.
Hargreaves, co-founder of Hargreaves Lansdown, wants to hold on to his about 19.8% stake and would prefer a take private at a higher price, one of the people said, speaking on condition of anonymity.
Peter Hargreaves said in a statement to Reuters: "I would not wish to be attributed to any comment you might dream up."
He has in the last two years been considering options for his stake, including taking the company private, a second person and a fourth source said.
He is the largest shareholder with a 19.78% stake, based on LSEG data.
Hargreaves Lansdown, which had a market capitalisation of 4.64 billion pounds ($5.91 billion) at the close on May 22, declined to comment.
Hargreaves Lansdown's shares ticked higher late in trading, and were last up 12.8% at the top of the FTSE 100.
Hargreaves Lansdown is the latest London-listed company to become a takeover target as analysts note an uptick in M&A activity in the UK.
The company was founded in 1981 by Hargreaves and Stephen Lansdown and listed in London in 2007 but has in the last few years seen its stock languish.
Its shares had lost 50% of their value since August 2020 as of Wednesday, while the FTSE 100 has gained more than 42%, based on LSEG data. The shares have risen around 15% since about 1500 GMT on Wednesday when reports of a bid emerged.
Some British asset managers have suffered net outflows in the past few years in volatile markets and as more customers have turned to low-cost index-tracking rivals.
Investment platforms like Hargreaves Lansdown have also faced tougher competition from online start-ups, with U.S. trading platform Robinhood (NASDAQ:HOOD) the latest to launch in Britain.
Despite headwinds, Hargreaves Lansdown reported a strong trading update for the first quarter last month, adding 34,000 new customers and 1.6 billion pounds of net new business as stock markets staged a recovery.
Hargreaves retired in 2015, according to Hargreaves Lansdown's website, while Lansdown stepped down as a board member and employee in 2012.
Lansdown holds a 5.71% stake and is the third largest investor. Neither Hargreaves nor Lansdown are currently employed by the company.
($1 = 0.7852 pounds)