Magellan Financial Group shares surged 31% Tuesday, marking the biggest jump since September 2006, after the Australian asset manager agreed to acquire Barrenjoey Capital Partners for A$1.6 billion ($1.1 billion). The stock was halted Monday while Magellan completed a capital raise to fund the purchase.
Under the deal, Magellan will buy about 10% of Barrenjoey from Barclays and issue shares to existing Barrenjoey shareholders. The acquisition represents a major expansion for Magellan beyond its traditional asset management business.
Morgan Stanley analysts upgraded Magellan to equal-weight, noting that merging with Barrenjoey will diversify and improve the company's earnings growth prospects. The deal signals Magellan's strategic push to broaden its financial services footprint in Australia's competitive market.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing