Hargreaves Lansdown boss Peter Hargreaves hits out at Royal Mail flotation
Outspoken attack: Peter Hargreaves
The billionaire founder of Hargreaves Lansdown has blasted City banks for undervaluing Royal Mail and branded them ‘arrogant b******s’ for ignoring retail investors.
In an outspoken attack, Peter Hargreaves said he blamed the investment banks working on the flotation – including Wall Street giant Goldman Sachs – for pricing the shares at 330p each.
At the close of trading yesterday shares were changing hands at 489p (up 2.95 per cent).
The comments come as Lazard, the Government’s financial adviser, was called yesterday to give evidence to the House of Commons Business Select Committee next month on how the 330p float price was derived.
Hargreaves Lansdown, Britain’s biggest retail stockbroker, came under fire after its website collapsed on Friday due to unprecedented demand.
Revealing that its assets under administration had grown £2.9bn to a record £39.3bn in the three months to September 30, the FTSE100 firm (up 31p to 1040p) said it had apologised to clients.
But Peter Hargreaves, pictured, said: ‘The Government relied on Goldman Sachs and the others to determine what the price was. I think they priced the shares too low.’
Revealing that the stockbroker’s attempts to provide advice on how to handle the float were ignored, he said: ‘The one problem with the City of London is that it doesn’t understand retail.
‘Goldman Sachs and these investment banks are arrogant b******s.
‘If they had their way there would have been no retail offer at all. It’s a hassle for them. If they price it cheaply enough they can ring ten mates – who all make money. Everybody’s happy.’
The comments were dismissed last night by one senior City source as a ‘convenient diversionary tactic for a boss of a broker whose platform buckled under the pressure’.
More than 690,000 retail investors got their hands on the postal stock.
Retail investors received 30 per cent of the shares, with institutional investors taking 70 per cent.
Lazard was the lead financial adviser on the float, while Goldman Sachs, UBS, Bank of America Merrill Lynch and Barclays also worked on the deal.
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