Platinum is understood to be in early-stage talks with L1 Capital, a global investment manager which runs a range of long-short and international equity funds.
If the merger proceeds, it will create a manager with combined $18 billion in funds under management.
In an ASX statement, Platinum said: “If the potential merger proceeds, the combined shareholders are expected to benefit from greater scale and diversity of investment strategies and distribution channels, as well as access to meaningful cost efficiencies. The merger has the potential to deliver material earnings and value accretion for Platinum shareholders over the near term.
“The discussions are still at a preliminary stage, and there is no guarantee that any transaction will eventuate from the discussions.”
Commenting in its own separate statement, L1 Capital co-founders Mark Landau and Raphael Lamm said: ““We believe a potential merger with Platinum represents a compelling value proposition for Platinum shareholders and has the potential to deliver material earnings and value accretion for shareholders.
“L1 Capital brings a strong investment track record and a loyal, diverse and growing investor base. This has allowed L1 Capital to grow profitably over many years and successfully launch new funds and strategies.
“Platinum has been one of the pioneers of global equities investing since the 1990s, with a strong brand and diverse client base. We expect the combined business to benefit from improved resourcing and capabilities across investments, client service and operations, as well as increased diversification across investment strategies and distribution channels.”
Separately, L1 Capital has taken a 9.6 per cent stake in Platinum from founder Kerr Neilson. Neilson has also granted a call option to L1 Capital over part of his remaining shareholding which would be exercised in the event of a competing proposal for Platinum. If this is exercised, it will give L1 Capital a 19.9 per cent stake.
Entry into a binding transaction remains subject to a number of conditions including due diligence and board approval.
