Magellan shareholders say yes to Barrenjoey takeover

Magellan Financial shareholders have approved the takeover of Barrenjoey at an implied valuation of $1.6 billion.

Magellan first announced the merger in early March, noting Brian Benari will become the group chief executive under the new entity. Sophia Rahmani will continue as chief executive of Magellan Investment Partners.

Magellan chair Andrew Formica at the extraordinary general meeting on Friday said the investment manager has been focused on evolving the firm into a more diversified financial services group.

"This strategy has been guided by a clear objective: to build a business that is more resilient, less dependent on any single revenue stream, and better positioned to generate sustainable returns through market cycles," Formica said.

"Our partnership with Barrenjoey has been central to this evolution."

Currently the firm consists of Magellan Investment Partners, Magellan Global Equities, Magellan Global Listed Infrastructure and Airlie Funds Management, along with a strategic partnership with Vinva Investment Management.

Magellan's existing investment management business operations will remain stand alone and unchanged. There will be no change to the investment decision-making, philosophy and process as a result of the merger, Formica said.

Magellan was a founding investor in Barrenjoey back in 2020. It currently owns 46% of the advisory firm, with 46.4% economic interest and a 5% voting interest.

"We have seen first-hand the calibre of its people, the strength of its culture, and the breadth and depth of its client relationships," he said.

"We believe that the proposed merger represents the natural next step in this partnership. It enables Magellan shareholders to move from partial economic participation in Barrenjoey to full ownership, allowing us to fully participate in any future growth and value creation."

Formica said the most compelling features of the takeover would be the breadth and balance of the revenue base.

Barrenjoey has contributed $32 million in Magellan's net profits in the 12 months to December 2025. The profits before tax could see a rise to $139 million after the takeover.

"The combined business will generate earnings across investment management, markets, advisory and capital markets activities, each of which is driven by different underlying factors and market conditions. This diversification is deliberate," he added.

Formica said the combined group will have a strong balance sheet, significant free cash flow, and the capacity to invest in growth opportunities, which will support dividends and long-term flexibility.

He also addressed the disappointment among some shareholders on the scale-back in the share purchase plan (SPP) of $130 million to acquire an additional interest in Barrenjoey before the merger.

The SPP was oversubscribed and demand exceeded the target raise by a considerable margin.

"The scale-back was implemented in accordance with the terms outlined in the SPP documentation and consistent with market practice. The approach taken sought to balance fairness and proportional participation across a large number of applicants," he said.

Formica added the strong demand itself is a positive signal and reflects confidence in Magellan's strategy and support for the transaction.