Magellan Financial Group has completed the sale of its 11.6 per cent interest in Guzman y Gomez to a Barrenjoey Capital Partners entity for a cash consideration of $140 million.
In an ASX announcement, the fund manager confirmed that the transaction had taken place in one tranche rather than in two tranches occurring in June and July as originally expected.
As a result of the sale, Magellan head of capital & advisory Craig Weight, has also resigned from his position as a non-executive director of GYG.
In announcing the deal last month, Magellan indicated that it was selling its stake in the Mexican fast food chain with the intention of seeding an investment trust comprising high-net-worth investors.
“GYG is an outstanding company, however, the sale of our shareholding is consistent with our strategy to focus on our core funds management business,” Magellan chairman Hamish McLennan said at the time.
“The upfront sale price represents a 36.3 per cent premium to our entry price in January 2021. We believe the sale is an excellent outcome for Magellan shareholders.”
The firm’s share price lifted 7.4 per cent after the completion of the sale was confirmed on Friday.
In May, Magellan said that it had expected to record a pre-tax profit on the sale of $34 million.
“The outcome we have achieved with this transaction reinforces the strength of our partnership with Barrenjoey. We remain committed to the long-term success of Barrenjoey as a major shareholder,” Mr McLennan said last month.
Magellan previously reported a further decline in its funds under management (FUM) to $65 billion as of the end of May, down from $68.6 billion at the end of April.
Retail FUM dipped to $23.6 billion from $24.8 billion while institutional FUM dropped to $41.4 billion from $43.8 billion.
Hamish Douglass is set to resume working with Magellan in a new consultancy role beginning in October after departing in February due to health reasons.
The fund manager has also named David George as its new CEO and managing director, whose appointment was brought forward to 19 July earlier this month.
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
