Magellan Financial Group has agreed to acquire the remaining two-thirds of Barrenjoey Capital Partners it does not already own, bringing the fast-growing investment bank fully under Magellan’s umbrella.
The surprise merger follows strong performance from Barrenjoey, whose net profit doubled last year. The investment bank delivered $522 million in revenue and $108 million in adjusted profit, highlighting the rapid growth of the five-year-old firm.
Under the deal, Barrenjoey staff will receive 92.6 million Magellan shares worth roughly $782 million at the $8.45 merger price. Employees will own 31.7% of the combined group, while existing Magellan shareholders will hold 63.5%. The transaction remains subject to shareholder approval at an extraordinary general meeting scheduled for April.
Investor confidence strengthened after the Lowy family revealed it had backed the merger by taking a 5.1% stake in Magellan, sending Magellan’s shares up 9% to $11.55.
Strategically, the merger gives Barrenjoey access to a $2 billion balance sheet, enabling it to pursue a credit rating and expand its fixed income trading and advisory businesses.
Magellan chairman Andrew Formica said the combination brings together two entrepreneurial firms with complementary strengths. Analysts say the deal could create a “Macquarie-style” financial services platform, blending funds management, investment banking and trading, and potentially reshaping competition across Australia’s capital markets.
