L1 Capital has entered into a merger deal with Platinum Asset Management, creating a A$16.5 billion investment manager.
Under the binding merger implementation deed, L1 Capital shareholders will hold around 74% of the issued share capital in the merged company, while Platinum shareholders will have 26%.
“We believe the combination of L1 Capital and Platinum will create one of Australia’s leading global investment firms, with a performance culture and extreme alignment with our investors,” said L1 Capital co-founder Raphael Lamm.
“At L1 Capital, we have several top performing funds that have delivered strong returns and exceptional downside protection, which we think will resonate well with Platinum’s client base.”
The merged company will be listed on the ASX under a new ticker symbol. Platinum will also be renamed, L1 Capital said.
Once combined, the company will have $16.5 billion in funds under management. Platinum will acquire 100% of L1 Capital’s issued share capital, with new Platinum ordinary shares then issued to L1 Capital shareholders.
The merger would lead to $20 million in pre-tax cost synergies per year, according to Platinum.
Platinum’s assets under management have fallen from $30 billion to around $8 billion since 2015, with its share price also dropping by 95% over that period.
L1 Capital’s (ASX: LSF) share price closed at $2.95 on Tuesday, down from its previous close of $2.96. Its market capitalisation is $1.86 billion.
Platinum’s (ASX: PTM) share price closed at $0.52 on Tuesday, flat from its previous close. Its market capitalisation is $299.8 million.
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