Hargreaves Lansdown has agreed a £5.4bn takeover by private equity suitors that will give hundreds of millions of pounds to its billionaire founders and result in the investment supermarket becoming the latest company to leave the London stock market.

Board members of the FTSE 100 company recommended the £11.40-a-share offer, which requires shareholder approval.

The announcement comes almost four months after Hargreaves was first approached with a £9.85-a-share offer by the consortium involving the buyout firm CVC Capital Partners, the group behind the Six Nations tournament and England’s Premiership Rugby.

The initial offer was rejected, leading to further discussions over the summer. Talks have been extended twice since, and Friday was the final deadline for the consortium to make an offer. The buyers are CVC, Sweden’s Nordic Capital, and a subsidiary of the Abu Dhabi Investment Authority.

The deal will result in a windfall for its billionaire founders, Peter Hargreaves and Stephen Lansdown, who still hold stakes worth almost 20% and 5.7% respectively.

However, shareholders have the option of either taking a payout or rolling their shares over into the private business. The announcement on Friday confirmed that Hargreaves would take only 50% of his shares into the new venture, resulting in an expected £535m payout. Lansdown will sell all of his shares for £308m.

Advisers on the deal, which include Fenchurch, Barclays, and Morgan Stanley, are also in line for lucrative fees.

The company has about 1.9 million clients and £155.3bn in assets under management.

The takeover is the latest blow to the London Stock Exchange, as Hargreaves joins a growing list of companies exiting the FTSE 100 index to private takeovers and rival financial hubs.

In May, the owner of Paddy Power, Flutter, announced it would switch its primary listing to New York, while the UK chip designer Arm opted to list on Wall Street last August after the government failed to persuade it to float in London. The Anglo-German tourism company Tui voted to move its main listing from London to Frankfurt earlierthis year.

Hargreaves has been listed on the London Stock Exchange since 2007. However, shares in the 43-year-old firm, which has 2,400 staff, have floundered in recent years, amid concerns over rising costs and risks related to a significant overhaul and tech investment plan.

The Hargreaves Lansdown chair, Alison Platt, said while the board was pleased with the management team’s progress, the cash offer was an attractive opportunity for shareholders “to realise an immediate and certain cash value for their investment at a level which may not be achievable until the execution of the strategy is delivered”.

The private equity consortium said: “We are aligned with management that, despite these strengths, the company now requires substantial investment in an extensive technology-led transformation to improve Hargreaves Lansdown’s proposition and resilience, and to drive the next phase of HL’s growth and development.”

The consortium said it would “accelerate its transformation plan”, investing in technology and improving its services.