Magellan Merges with Barrenjoey: A New Era

0:00It's March 2nd, here's your Sydney news in two minutes. Magellan Financial Group has announced a $1.6 billion merger with Berenjoy, the investment bank it helped launch five years ago. The deal combines Magellan's funds management business with Berenjoy's fast-growing operations, where Magellan holds a 36% stake from. It's original $150 million seed investment. That stake has now quadrupled in value. The merger comes as Magellan seeks a turnaround after a sharp drop in its funds under management from around $120 million for years ago to just $40 million today. Meanwhile, Berenjoy has thrived in a competitive market, building a strong reputation under co-executive chairman Matthew Grounds and Guy Fowler. Who left UBS to start the firm? Investors have grown more excited about Magellan's Berenjoy holding than its core business, especially as the company's share price has fallen more than 77% over the past 5 years.

1:02The deal brings star power from Grounds and Fowler, key deal makers in financial circles along with diversified earnings to help stabilize Magellan. Berenjoy's profits nearly doubled in the six months ending December. Highlighting its growth potential, despite no major synergies with Magellan, Grounds and Fowler will be the largest shareholder's post-merger, with their stakes locked up for 9 years to keep them committed long-term. Berenjoy's profits will get a read on investor sentiment Tuesday, when Magellan shares resume trading after a trading halt. The merger could test the deal making skills of Grounds and Fowler while giving Magellan a fresh start. This Dean and story comes to you thanks to our sponsor. When you want calm, do not reach for your phone. Lay back and listen, S-O-L-I-SoliPillow.com