Magellan Financial Group (ASX:MFG) entered into an agreement to merge with Barrenjoey Capital Partners, a move designed to create a "diversified, client-focussed Australian financial services group, with a proven talent base across investment management, corporate finance, equities, fixed income and capital markets."
The transaction values Barrenjoey at an implied $1.62 billion on a 100% equity basis.
The path to "completion" involves a multi-stage funding strategy.
Initially, MFG will increase its economic interest in Barrenjoey through a non-underwritten institutional placement of ordinary shares and a subsequent share purchase plan for shareholders in Australia and New Zealand.
Following the satisfaction of specific conditions, MFG will acquire the remaining issued capital by issuing new MFG ordinary shares, known as "consideration shares," to Barrenjoey shareholders.