Platinum shareholders vote on L1 merger
Shareholders at Platinum Asset Management have voted on the decision to merge the firm with L1 Capital.
In an extraordinary general meeting (EGM) held on 22 September, Platinum shareholders voted on a range of motions, including director appointments and the firm’s name change to L1 Group with the ASX ticker of L1G.
In total, nine resolutions were proposed, and all were carried either as an ordinary or special resolution. The two firms had entered into binding terms in July, having originally first mooted the possible merger back in May 2025.
The decision to merge the companies received approval from an independent expert last week in the absence of a superior proposal or competing proposal.
Platinum chair Guy Strapp said in his EGM address to shareholders that if the deal was approved, they would benefit in four ways from an enlarged group.
These were:
- Exposure to a market-leading investment platform of listed equities and alternative investment strategies.
- Exposure to a growing, scalable, and well-diversified investment management business with a diversified client base across institutional, wholesale, high-net-worth (HNW), and retail investors in Australia and globally.
- Potential to deliver annual pre-tax net synergy and cost savings benefits of $20 million and to be materially EPS accretive for shareholders. Specifically, the merger is expected to be double-digit EPS accretive in the next 12 months following completion and over 30 per cent EPS accretive for shareholders in the financial year 2027 (the first full fiscal year post-completion).
- Preservation of ongoing balance sheet strength to support investment in accretive growth opportunities.
On the other hand, if the deal had been voted down, Strapp warned this would expose Platinum shareholders to risks that could impact the value of their shares and the risk of further fund outflows, which have already fallen substantially in recent months. Since the start of the year, funds under management have fallen from $10.9 billion to $7.5 billion and further outflows are expected in October and November as a result of a institutional mandate termination.
He said: “If the merger is approved by shareholders today, Platinum will acquire 100 per cent of Class A, Class B, Founder and ordinary shares in L1 Capital. In return, the existing L1 Capital shareholder will be issued with new ordinary shares in Platinum, resulting in those L1 Capital shareholders holding approximately 74 per cent and existing Platinum shareholders holding approximately 26 per cent of the issued share capital in the merged group immediately after competition of the merger.”
It is also expected Anne Loveridge, Philip Moffitt, and James Simpson will resign from the Platinum board upon completion, and Jane Stewart and Neil Chatfield will be appointed.
Earlier this year, Morningstar equity analyst Shaun Ler said the combined entity will have greater asset class and client diversity, which would facilitate cross-selling and customer retention.
“The merger injects new life into Platinum, helping to arrest the organic decline of its business by merging with another asset manager that has better-performing products experiencing inflows. It also potentially unlocks value by eliminating duplicate costs,” said Ler.
“This should help stabilise funds under management and improve earnings, mainly from cross-selling L1’s product set to Platinum clients.”
AUTHOR
Laura Dew
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