The giant investment platform, Hargreaves Lansdown, will be taken private by private equity firms in a £5.4bn deal that will provide its founders with a windfall and see the firm leave the London Stock Exchange. Shareholders have the option to take cash or keep some of their shares in the new private business.

Hargreaves Lansdown, one of the largest investment platforms in the UK, has agreed to a £5.4 billion takeover by private equity firms. The deal is significant because it will see the firm come off the London Stock Exchange—one of the largest exchanges in the UK for buying and selling stocks.

This takeover was agreed upon by the board members of Hargreaves Lansdown, a member of the FTSE 100 index—a list of the top 100 companies on the London Stock Exchange. The private-equity firms involved have offered £11.40 per share, and it is now for the shareholders to decide whether they would want to take it up.

It started off some four months ago, with an approach to Hargreaves Lansdown from the private equity firms at an offer price of £9.85 per share. The company rejected the opening offer, which led to further discussions over the summer. The talks continued, with the private equity firms given a final deadline of the previous Friday to come up with an offer. The firms in this takeover include big name in the world of private equity, CVC Capital Partners, alongside Sweden’s Nordic Capital, and a subsidiary of the Abu Dhabi Investment Authority.

This deal is expected to bring a lot of money to the founders of Hargreaves Lansdown, Peter Hargreaves and Stephen Lansdown. They still hold large stakes in the business, with Peter Hargreaves owning nearly 20% and Stephen Lansdown around 5.7%. Today’s takeover will bring a cheque, running into hundreds of millions of pounds, for the founders. Selling half of his shares, Peter Hargreaves is set to receive some £535 million, while Stephen Lansdown will sell all for about £308 million.

There will have to be an either-or decision arrived at by the shareholders of the company. They could either opt for a cash payout from the deal or roll their shares into a new private business that would be created after the takeover. The nature of this decision is such that it might impact how much money they are to earn from their investment in the long term.

It means a potential bonanza too for the advisors on the deal, which includes big banks like Barclays and Morgan Stanley, who are set to take in a lot of money in fees.

Hargreaves Lansdown has around 1.9 million clients, and it holds £155.3 billion under management. That is a lot of cash belonging to a good number of people whom they handle. It is seen as another big company leaving the London Stock Exchange, and that is a worrying trend for the UK’s financial market.

In recent times, some large companies have decided to shift their listings away from London. For example, the owner of bookmaker Paddy Power, one of the famous betting companies, declared shifting its primary listing to New York. Besides that, in August, UK chip designer Arm decided to list on Wall Street instead of London. Added to this, tourism firm Tui shifted its main listing from London to Frankfurt this year itself, early in January.

Listed on the London Stock Exchange since 2007, Hargreaves Lansdown is now 43 years old and employs 2,400 people. The business has stuttered of late; its shares have not performed so well recently, partly due to rising cost concerns and the risks of a major overhaul and investment in new technology.

Alison Platt, chair of Hargreaves Lansdown, said that while the board is pleased with the progress that has been made by the management team, the cash offer from the private equity firms presents an excellent opportunity for shareholders. As she explains, under this deal, shareholders have the opportunity to receive cash for their shares at a value that might not be achievable until the complete delivery of the company’s strategy.

The private equity consortium, the group of firms buying Hargreaves Lansdown, says it shares the view of management that this company needs huge investment to improve its technology and services. They intend to make extensive investments in the firm’s technology that will propel the next phase of growth and development for the betterment of the company.

That’s the big deal: Hargreaves Lansdown agreed to this £5.4bn takeover in the world of finance. It is the newest giant firm to leave the London Stock Exchange and has huge windfall implications for the founders of the company. Now, the future of the company will be shaped by the plans and investments of new private owners.