REG - CVC Advisers Limited Nordic Cap XI Delta Hargreaves Lansdown - Offer Update

Hargreaves LansdownAnnouncement

27/09/2024 07:00

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RNS Number : 9034F  CVC Advisers Limited  27 September 2024

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

27 September 2024

RECOMMENDED FINAL* CASH ACQUISITION

of

Hargreaves Lansdown plc ("HL")

by

Harp Bidco Limited ("Bidco")

(a newly formed company indirectly owned 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)

 

UPDATE ON BIDCO'S FINANCING ARRANGEMENTS

On 9 August 2024, the HL Independent Directors and the board of directors of
Bidco announced that they had reached agreement on the terms and conditions of
a recommended final(*) cash acquisition of the entire issued and to be issued
ordinary share capital of HL by Bidco (the "Acquisition"). The Acquisition is
to be implemented by means of a Court-sanctioned scheme of arrangement under
Part 26 of the Companies Act 2006 (the "Scheme"). The scheme document in
relation to the Scheme was published and sent to HL Shareholders and, for
information only, to persons with information rights and participants in the
HL Share Plans on 6 September 2024 (the "Scheme Document").

Capitalised terms used but not defined in this announcement have the meanings
given to them in the Scheme Document. All references to times in this
announcement are to London, United Kingdom times, unless otherwise stated.

Certain funds and other entities, in each case managed by HPS Investment
Partners, KKR Credit Advisors, Apollo Global Management and Blackstone Credit
(the "Original Term Lenders") entered into a commitment letter dated 2 August
2024 (the "Original Commitment Letter") under which they agreed to provide
Finco an interim senior term loan in an amount equal to £1,750 million (the
"Interim Facility B"). Together with the Original Commitment Letter, the
Original Term Lenders and Finco also entered into, amongst others, a closing
payments letter (the "Original Closing Payments Letter"), an interim
facilities agreement dated 2 August 2024 (the "Interim Facilities Agreement")
and a conditions precedent status letter (the "Original CP Status Letter").

On 19 September 2024, in addition to the Original Term Lenders, certain funds
and other entities, including those managed by Oaktree Capital Management,
PineStreet Asset Management, AlbaCore Capital, LGT Capital Partners,
StepStones Group, Novo Holdings, HSBC Bank plc, Mizuho Bank, Ltd. and MUFG
Bank, Ltd., London Branch (collectively, the "19 September Interim Lenders")
agreed to become lenders under the Interim Facilities Agreement by way of a
transfer certificate (the "First Transfer Certificate"). On 19 September 2024,
the Original Commitment Letter, Original Closing Payments Letter and Original
CP Status Letter, were amended accordingly to cater for the participation of
the 19 September Interim Lenders (as amended, the "First Amended and Restated
Financing Documents").

Bidco announces that, on 26 September 2024, in addition to the Original Term
Lenders and the 19 September Interim Lenders, certain funds and other entities
in each case managed by Korea Investment and Securities Co., Ltd, KDB Asia
Limited, Sona Asset Management and The Public Sector Pension Board (PSP
Investments) (collectively, the "New Interim Lenders") agreed to become
lenders under the Interim Facilities Agreement by way of a transfer
certificate (the "Second Transfer Certificate"). Bidco also announces that, on
26 September 2024, each of the First Amended and Restated Financing Documents
were further amended accordingly to cater for the participation of the New
Interim Lenders (as amended, the "Second Amended and Restated Financing
Documents").

Copies of the Second Amended and Restated Financing Documents and Second
Transfer Certificate will be available, subject to certain restrictions
relating to persons in, or resident in, Restricted Jurisdictions, on HL's
website at www.hl.co.uk/investor-relations
(http://www.hl.co.uk/investor-relations) .

* The financial terms of the Cash Offer and the Alternative Offer are final
and will not be increased or improved, except that Bidco reserves the right to
increase the amount of the Cash Consideration and improve the financial terms
of the Alternative Offer if there is an announcement on or after the date of
the Rule 2.7 Announcement of an offer or a possible offer for HL by a third
party offeror or potential offeror. Bidco reserves the right to elect to
implement the Acquisition by way of an Offer as an alternative to the Scheme
(with the consent of the Panel (where necessary) and subject to the terms of
the Cooperation Agreement (if applicable)).

Enquiries:

 CVC Private Equity Group                                                     +44 (0) 20 7420 4200

 Carsten Huwendiek

 Nick Board
 Nordic Capital                                                               +46 8 440 5050

 Elin Ljung (of Nordic Capital Advisors)
 Platinum Ivy                                                                 +971 2 415 0000

 Garry Nickson
 Goldman Sachs International (Financial Adviser to Bidco and the Consortium)  +44 (0) 20 7774 1000

 Mark Sorrell

 Nick Harper

 James Lucas

 Cara Pazdon

 Camila Rodriguez-Bedoya
 FGS Global (PR Adviser to Bidco and the Consortium)                          +44 (0) 20 7251 3801

 Guy Lamming

 Mike Turner

 Anjali Unnikrishnan

Important notices relating to financial adviser

Goldman Sachs International ("Goldman Sachs"), which is authorised by the PRA
and regulated by the FCA and the PRA in the United Kingdom is acting
exclusively for Bidco and the Consortium as financial advisers and no one else
in connection with the Acquisition and other matters set out in this
announcement and will not be responsible to anyone other than Bidco and the
Consortium for providing the protections afforded to clients of Goldman Sachs,
nor for providing advice in connection with the Acquisition, the content of
this announcement or any matter referred to herein. Neither Goldman Sachs nor
any of Goldman Sachs' subsidiaries, affiliates or branches owes or accepts any
duty, liability or responsibility whatsoever (whether direct, indirect,
consequential, whether in contract, in tort, under statute or otherwise) to
any person who is not a client of Goldman Sachs in connection with this
announcement, any statement contained herein or otherwise.

Further information

This announcement is for information purposes only and is not intended to and
does not constitute, or form part of, an offer, invitation or the solicitation
of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities, or the solicitation of any vote or approval in any
jurisdiction, pursuant to the Acquisition or otherwise, nor shall there be any
sale, issuance or transfer of securities of HL in any jurisdiction in
contravention of applicable law. The Acquisition is being made solely by means
of the Scheme Document which, together with the Forms of Proxy and the Form of
Election, contain the full terms and conditions of the Acquisition. Any vote
or decision in respect of, or other response in relation to, the Scheme or the
Acquisition should be made only on the basis of the information in the Scheme
Document.

This announcement does not constitute a prospectus or prospectus equivalent
document.

If you are in any doubt as to the contents of this announcement (or any
accompanying documents) or what action you should take, you are recommended to
seek your own personal financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or other independent financial adviser
authorised under the Financial Services and Markets Act 2000, if you are
resident in the United Kingdom, or, if not, from another appropriately
authorised independent financial adviser.

Overseas Shareholders

The release, publication or distribution of this announcement in or into
jurisdictions other than the UK may be restricted by law and therefore any
persons who are subject to the laws of any jurisdiction other than the UK
should inform themselves of, and observe, any applicable legal or regulatory
requirements. Any failure to comply with such requirements may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person.

Neither this announcement nor any of the accompanying documents do or are
intended to constitute or form part of any offer or invitation to purchase, or
otherwise acquire, subscribe for, sell or otherwise dispose of, any securities
or the solicitation of any vote or approval pursuant to the Scheme or
otherwise, in any jurisdiction in which such offer, invitation or solicitation
is unlawful. This announcement has been prepared in accordance with and for
the purpose of complying with English law, the Takeover Code, the Market Abuse
Regulation, the Listing Rules and the Disclosure Guidance and Transparency
Rules and information disclosed may not be the same as that which would have
been prepared in accordance with the laws of jurisdictions outside England.
 

The availability of the Acquisition (including the Alternative Offer) to HL
Shareholders who are not resident in and citizens of the UK may be affected by
the laws of the relevant jurisdictions in which they are located or of which
they are citizens. In particular, the ability of persons who are not resident
in the UK to vote their HL Shares with respect to the Scheme at the Court
Meeting, or to appoint another person as proxy to vote at the Court Meeting on
their behalf, may be affected by the laws of the relevant jurisdictions in
which they are located. Persons who are not resident in the UK should inform
themselves of, and observe, any applicable legal or regulatory requirements of
their jurisdictions. To the fullest extent permitted by applicable law, the
companies and persons involved in the Acquisition (including the Alternative
Offer) disclaim any responsibility or liability for the violation of such
restrictions by any person.

Unless otherwise determined by Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition (including the
Alternative Offer) will not be made available, in whole or in part, directly
or indirectly, in, into, from, or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or of any facility of a national, state or other securities exchange of,
any Restricted Jurisdiction where to do so would violate the laws in that
jurisdiction and no person may vote in favour of the Scheme by any such use,
means, instrumentality or from within a Restricted Jurisdiction or any other
jurisdiction if to do so would constitute a violation of the laws of that
jurisdiction. Copies of this announcement and other documentation relating to
the Acquisition (including the Alternative Offer) are not being, and must not
be, directly or indirectly, mailed or otherwise forwarded, distributed or sent
in or into or from any Restricted Jurisdiction and persons receiving such
documents (including, without limitation, agents, custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send them in or
into or from any Restricted Jurisdiction. Doing so may render invalid any
related purported vote in respect of the Acquisition. If the Acquisition is
implemented by way of an Offer (unless otherwise permitted by applicable law
and regulation), the Offer (including the Alternative Offer) may not be made
directly or indirectly, in, into, from, or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or of any facility of a national, state or other securities exchange of,
any Restricted Jurisdiction and the Offer (including the Alternative Offer)
may not be capable of acceptance by any such use, means, instrumentality or
facilities or from within any Restricted Jurisdiction.

HL Shareholders should be aware that the Acquisition may have tax consequences
and that such consequences, if any, are not described herein. HL Shareholders
are urged to consult with appropriate legal, tax and financial advisers in
connection with the consequences of the Acquisition (including any election
for the Alternative Offer) on them. A summary of the expected tax impact of
the Acquisition for UK shareholders is set out in  Part VIII (UK Taxation) of
the Scheme Document.

Further details in relation to Overseas Shareholders are contained in
paragraph 16 of Part II (Explanatory Statement) of the Scheme Document.

Notice to US HL Shareholders

The Acquisition relates to the shares of an English company with shares
admitted to trading on the London Stock Exchange and is being made by means of
a scheme of arrangement provided for under English law. A transaction
implemented by means of a scheme of arrangement is not subject to the tender
offer or proxy solicitation rules under the US Exchange Act. Accordingly, the
Scheme is subject to the disclosure requirements and practices applicable in
the UK to takeover offers and schemes of arrangement which differ from the
disclosure requirements of the US tender offer and proxy solicitation rules.
The financial information included or referred to in the Rule 2.7
Announcement, the Scheme Document and this announcement has been or will have
been prepared in accordance with generally accepted accounting principles of
the UK and thus may not be comparable to financial information of US companies
or companies whose financial statements are prepared in accordance with
generally accepted accounting principles in the United States.

If, in the future, Bidco exercises its right to implement the Acquisition by
way of an Offer, which is to be made into the US, such Offer will be made in
compliance with applicable US laws and regulations.

It may be difficult for US holders of HL Shares to enforce their rights and
any claim arising out of US federal laws, since Bidco, each member of the
Topco Group and HL are located in a non-US jurisdiction, and some or all of
their officers and directors may be residents of non-US jurisdictions. US
holders of HL Shares may not be able to sue a non-US company or its officers
or directors in a non-US court for violations of the US securities laws.
Further, it may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's judgement.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US
Exchange Act, Bidco, its nominees or its brokers (acting as agents), may from
time to time make certain purchases of, or arrangements to purchase, HL Shares
outside of the US, other than pursuant to the Acquisition, until the date on
which the Acquisition becomes Effective, lapses or is otherwise withdrawn.
Also, in accordance with Rule 14e-5(b) of the US Exchange Act, Goldman Sachs
will continue to act as an exempt principal trader in HL Shares on the London
Stock Exchange. These purchases may occur either in the open market at
prevailing prices or in private transactions at negotiated prices. Any
information about such purchases or arrangements to purchase will be disclosed
as required in the UK, will be reported to a Regulatory Information Service
and will be available on the London Stock Exchange website,
www.londonstockexchange.com.

US HL Shareholders also should be aware that the Acquisition may have tax
consequences in the US and that such consequences, if any, are not described
in this announcement or the Scheme Document. US HL Shareholders are urged to
consult with appropriate legal, tax and financial advisers in connection with
the tax impact of the Acquisition on them.

Forward looking statements

This announcement (including information incorporated by reference in this
announcement), statements made regarding the Acquisition, and other
information published by Bidco and HL contain statements which are, or may be
deemed to be, "forward-looking statements". Forward-looking statements are
prospective in nature and are not based on historical facts, but rather on
current expectations and projections of the management of Bidco and HL about
future events, and are therefore subject to risks and uncertainties which
could cause actual results to differ materially from the future results
expressed or implied by the forward-looking statements.

The forward-looking statements contained in this announcement include
statements relating to implementation of the Acquisition and other statements
other than historical facts. Often, but not always, forward-looking statements
can be identified by the use of forward-looking words such as "prepares",
"plans", "expects" or "does not expect", "is expected", "is subject to",
"budget", "projects", "synergy", "strategy", "scheduled", "goal", "estimates",
"forecasts", "cost-saving", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or statements that
certain actions, events or results "may", "could", "should", "would", "might"
or "will" be taken, occur or be achieved. Forward looking statements may
include statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of Bidco's,
HL's, any member of the Topco Group's or any member of the HL Group's
operations and potential synergies resulting from the Acquisition; and (iii)
the effects of global economic conditions and governmental regulation on
Bidco's, HL's, any member of the Topco Group or any member of the HL Group's
business.

Although Bidco believes that the expectations reflected in such
forward-looking statements are reasonable, Bidco can give no assurance that
such expectations will prove to be correct. By their nature, forward-looking
statements involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ materially
from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other Conditions on the proposed terms and
schedule; changes in the global political, economic, business and competitive
environments and in market and regulatory forces; changes in future exchange
and interest rates; changes in tax rates; future business combinations or
disposals; changes in general economic and business conditions; changes in the
behaviour of other market participants; changes in the anticipated benefits
from the Acquisition not being realised as a result of changes in general
economic and market conditions in the countries in which Bidco and HL operate,
weak, volatile or illiquid capital and/or credit markets, changes in tax
rates, interest rate and currency value fluctuations, the degree of
competition in the geographic and business areas in which Bidco and HL operate
and changes in laws or in supervisory expectations or requirements. Other
unknown or unpredictable factors could cause actual results to differ
materially from those expected, estimated or projected in the forward-looking
statements. If any one or more of these risks or uncertainties materialises or
if any one or more of the assumptions proves incorrect, actual results may
differ materially from those expected, estimated or projected. Such
forward-looking statements should therefore be construed in the light of such
factors. Neither Bidco nor HL, nor any of their respective associates or
directors, officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually occur. You are
cautioned not to place any reliance on these forward-looking statements. The
forward-looking statements speak only at the date of this announcement. All
subsequent oral or written forward-looking statements attributable to Bidco or
any member of the Topco Group or the HL Group, or any of their respective
associates, directors, officers, employees or advisers, are expressly
qualified in their entirety by the cautionary statement above.

Other than in accordance with their legal or regulatory obligations, neither
Bidco nor HL is under any obligation, and Bidco and HL expressly disclaim any
intention or obligation, to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

Dealing and opening position disclosure requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) of the Takeover Code
applies must be made by no later than 3.30 p.m. (London time) on the 10(th)
business day following the commencement of the Offer Period and, if
appropriate, by no later than 3.30 p.m. (London time) on the 10(th) business
day following the announcement in which any securities exchange offeror is
first identified. Relevant persons who deal in the relevant securities of the
offeree company or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant securities of
each of (i) the offeree company and (ii) any securities exchange offeror(s),
save to the extent that these details have previously been disclosed under
Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be
made by no later than 3.30 p.m. (London time) on the business day following
the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.

Publication on a website

A copy of this announcement will be made available, subject to certain
restrictions relating to persons in, or resident in, Restricted Jurisdictions,
on HL's website at www.hl.co.uk/investor-relations
(http://www.hl.co.uk/investor-relations) . For the avoidance of doubt, neither
the content of this website nor of any website referred to or accessible from
any hyperlinks set out in this announcement is incorporated by reference or
forms part of this announcement.

Rounding

Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of figures that precede them.

General

The statements contained in this announcement are made as at the date of this
announcement unless some other time is specified in relation to them, and
service of this announcement shall not give rise to any implication that there
has been no change in the facts set forth in this announcement since such
date. Nothing in this announcement shall be deemed to be a forecast,
projection or estimate of the future financial performance of HL or Bidco
except where otherwise expressly stated.

The Acquisition is subject to English law, the jurisdiction of the courts of
England and Wales, and the applicable requirements of the Companies Act, the
Takeover Code, the Panel, the London Stock Exchange and the FCA.

 

 

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