The share offer, which has been made to institutional investors and some clients of Hargreaves Lansdown, will see the firm join the main market as a FTSE250 company valued at £650m-£700m.
The majority of shares will be sold by founders Peter Hargreaves and Stephen Lansdown, who own 80 per cent of the company between them. Shares will also come from current and former employees together with the employee benefit trust. No new capital will be raised from the offer.
The flotation will restrict senior management to selling 25 per cent of their post-flotation shares on announcement of the group’s annual results on June 30 each year from 2008 until 2011.
Hargreaves and Lansdown will retain the majority share in the company although Lansdown is selling a bigger stake of the business. Hargreaves has committed himself to the company for at least the next 10 years. No one person or company can take the entire 25 per cent stake being floated.
Hargreaves says: “It is an impressive achievement that we have turned a business that started in a bedroom back in 1981 into a FTSE 250 company. If anything, it underlines that wrap is the right business model.”
Rensburg UK mid-cap growth trust manager Paul Spencer says: “It looks like being a company that merits close attention but we will not buy it solely on its past success. It does make a change that I will go and see them rather than them seeing me.”