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.