The Magellan Financial Group Ltd (ASX: MFG) share price is $9.43, up 1%, as the market awaits news on the Barrenjoey merger vote.
Magellan held an extraordinary meeting this morning for shareholders to vote on the proposed merger with Barrenjoey Capital Partners.
Ahead of the meeting, Magellan revealed that 91% of proxy votes received had approved the merger.
Magellan has about 185.7 million shares on issue, and received 101.9 million proxy votes in favour of the deal.
The Magellan board unanimously recommends the merger.
Magellan is yet to announce the formal outcome from today's meeting, but the result appears effectively a fait accompli.
The deal values Barrenjoey, an investment bank that launched only six years ago, at $1.616 billion on a 100% basis.
Image source: Getty Images
A new era for Magellan
Magellan was an early backer of Barrenjoey, which was founded by former UBS bankers Matthew Grounds and Guy Fowler OAM in 2020.
Barrenjoey's current and founding CEO, Brian Benari, was previously the CEO of Challenger Ltd (ASX: CGF).
Magellan conducted a $130 million institutional capital raise and a $20 million share purchase plan (SPP) at $8.45 per share to help fund the deal.
The Lowy family, founder of the Westfield empire, participated in the institutional raise, investing just over $79 million for 5.1% stake.
The SPP was vastly oversubscribed but had a participation rate of only 17% of shareholders.
Magellan said it received $129.4 million worth of valid SPP applications from 5,195 shareholders.
Magellan employed a savage scale-back that disappointed many investors, and the new shares began trading last Thursday.
Long-suffering retail investors are no doubt hoping that the merger will represent a turnaround for Magellan after five hard years.
Magellan share price slump
The Magellan share price has fallen 78% over five years.
The investment manager began its downhill slide in 2021.
That year, Magellan lost a major client worth 12% of its annual revenue, and chief stock picker and co-founder, Hamish Douglass, resigned.
Funds under management have declined from $113 billion in July 2021, when Magellan shares were worth about $50, to $38 billion today.
At the EGM, Magellan chair Andrew Formica said:
MFG has been on a deliberate and considered journey over recent years.
While we remain firmly committed to our core investment management business, we have also been focused on evolving MFG into a more diversified financial services group.
This strategy has been guided by a clear objective: to build a business that is more resilient, less dependent on any single revenue stream, and better positioned to generate sustainable returns through market cycles.
Our partnership with Barrenjoey has been central to this evolution.
Barrenjoey reported $522 million in revenue and an adjusted NPATA of $108 million for CY25.
Magellan released a presentation before the meeting this morning.
