Platinum Asset Management enters early-stage merger talks with L1 Capital

Platinum Asset Management (ASX:PTM) announced that it is in early-stage discussions with shareholders of L1 Capital, an independent global investment manager, regarding a potential merger.

The proposed merger would combine the two investment managers, resulting in a business with approximately $18 billion in funds under management.

If the merger proceeds, shareholders are expected to benefit from increased scale, diversified investment strategies, broader distribution channels, and significant cost efficiencies, with potential earnings accretion for Platinum shareholders.

The discussions are still preliminary, with no guarantee of a transaction. Any merger would be contingent on satisfactory due diligence, final transaction agreements, and board approvals from both companies.

Platinum CEO Jeff Peters highlighted L1 Capital's strong investment track record and the potential for combining expertise and resources for the benefit of Platinum shareholders.

The merger proposal would involve Platinum acquiring L1 Capital in exchange for new shares in Platinum, subject to shareholder approval and regulatory clearance.

Following the merger, L1 Capital shareholders would hold approximately 75% of the combined entity, while existing Platinum shareholders would retain 25%.

Performance fees from the L1 long short funds would also be allocated to L1 Capital shareholders under specific terms.

L1 Capital has acquired a 9.6% shareholding in Platinum from Kerr Neilson and holds a call option on a portion of his remaining stake, potentially increasing its total holding to 19.9% in the event of a competing offer for Platinum.