Platinum AM and L1 Capital confirm merger talks

Platinum Asset Management has been confirmed as being in discussions with L1 Capital around a merger.

L1 Capital confirmed the merger discussions saying the potential merger would combine two complementary investment managers to create an investment business with approximately $18 billion in funds under management (FUM).

Under the non-binding and indicative key commercial terms of the Potential Merger, Platinum will acquire L1 Capital in return for the issue of new ordinary shares in Platinum. Immediately following completion of the Potential Merger, L1 Capital shareholders would own around 75% of the shares in the combined entity and current Platinum shareholders would own around 25% of the shares in the combined entity.

Commenting on the transaction, Co-founders of L1 Capital, Mark Landau and Raphael Lamm said: “We believe a Potential Merger with Platinum represents a compelling value proposition for Platinum shareholders and has the potential to deliver material earnings and value accretion for shareholders.

“L1 Capital brings a strong investment track record and a loyal, diverse and growing investor base. This has allowed L1 Capital to grow profitably over many years and successfully launch new funds and strategies.

“Platinum has been one of the pioneers of global equities investing since the 1990’s, with a strong brand and diverse client base. We expect the combined business to benefit from improved resourcing and capabilities across investments, client service and operations, as well as increased diversification across investment strategies and distribution channels”.

The announcement said entry into a binding transaction remains subject to a number of conditions, including each of Platinum and L1 Capital completing satisfactory due diligence on the other; entry into binding transaction documentation and each of Platinum and L1 Capital receiving their respective Board approvals. There is no guarantee that a transaction will result from these discussions.