Hunter Hall and Pengana Holdings have announced they would merge their businesses to create a funds management firm with a new platform for growth.
Under the terms of a deal, Hunter Hall would buy all the shares in Pengana in return for the issuance of approximately 74.1 million Hunter Hall shares to Pengana shareholders.
This should result in Hunter Hall shareholders owning 27 per cent and Pengana shareholders owning around of 73 per cent of the issued equity of Hunter Hall, comprising approximately 101.5 million shares post transaction.
The merger would be subject to Hunter Hall shareholder approval and other conditions.
However, the board of Hunter Hall said it planned to unanimously recommend that shareholders vote in favour of the proposed merger.
According to Hunter Hall, the proposed merger would be a positive step for the company, with strong alignment between the two businesses, and with Pengana’s funds under management (FUM) in Australian equities complementing Hunter Hall’s globally invested funds.
The combined FUM of the transaction and the merged entity stood at $3.1 billion, as at 31 December 2016, including $1.95 billion in Australian equities, $950 million in international equities and $200 million in other equity strategies.
The chief executive of the merged business would be Russell Pillemer.
Hunter Hall chairman, Kevin Eley, said: “This merger is a very exciting opportunity for Hunter Hall shareholders and investors alike. The board has assessed the proposed merger to be superior to the current off-market takeover offers for Hunter Hall”.
In the event the transaction is approved, the proposed board members of the merged business will be:
- Chairman, Warwick Negus, former CEO of Colonial First State Global Asset Management and co-counder of 452 Capital;
- Kevin Eley, current Hunter Hall board member;
- David Groves, current Hunter Hall board member;
- Russell Pillemer, founder and managing director of Pengana and second largest Pengana shareholder;
- Rob Barry, existing Pengana director and co-founder of Dominguez & Barry, former CEO of Dominguez Barry Samuel Montagu Limited; and
- Jeremy Dunkel, founding director of Pengana.
