Magellan Financial Group (ASX:MFG) Chairman Andrew Formica has called on shareholders to back a proposed merger with Barrenjoey Capital Partners, labelling the deal a "significant step in MFG’s evolution."
In a letter accompanying the notice of meeting, Formica argued the transaction would forge a diversified, client-focussed Australian financial services powerhouse by integrating Magellan's investment management with Barrenjoey’s expertise in corporate finance, equities, and capital markets.
The deal structure involves Magellan acquiring the remaining interest in Barrenjoey it does not already own through the issuance of 106.8 million new MFG shares.
While this represents a 57.5% increase in Magellan’s total share count, existing shareholders would retain a 63.5% majority stake in the combined entity.
A refreshed leadership suite is set to take the reins post-merger, with David Gonski stepping in as independent chairman and Brian Benari as Group CEO, while Formica transitions to deputy chair.
Shareholders are scheduled to cast their votes on the proposal on April 10.
At the time of reporting, Magellan Financial’s share price was $11.18.