- Magellan Financial Group (MFG) is selling its 11.6 per cent stake in Mexican food chain Guzman y Gomez for $140 million
- MFG has signed a deal to sell its interest to an entity run by Barrenjoey Capital, which then plans to create an investment trust of high-net-worth investors
- The sale price represents a 36.3 per cent premium to what Magellan paid for the stake just 18 months ago
- The transaction is expected to take place in two tranches in June and July 2022
- Magellan shares are down 7.36 per cent to $15.97 each
Magellan Financial Group (MFG) has agreed to sell its 11.6 per cent stake in Mexican food chain Guzman y Gomez (GYG) for $140 million.
The group has signed a deal to sell its interest to an entity run by Barrenjoey Capital, which then plans to create an investment trust of high-net-worth investors.
On top of the $140 price tag, Magellan could pocket an extra $6 million payment based on GYG’s future performance and the realisation of the investment by the trust.
The sale price represents a 36.3 per cent premium to what Magellan paid for its stake in GYG just 18 months ago. The company said it expected to record a pre-tax profit of $34 million on the sale.
The sale is subject to the completion of a pre-emptive rights process under the GYG shareholders’ deed that gives GYG shareholders the right to buy Magellan’s shares on the same terms.
“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.
“We believe the sale is an excellent outcome for Magellan shareholders. Magellan is pleased with the performance of its Magellan Capital Partners investments. The outcome we have achieved with this transaction reinforces the strength of our partnership with Barrenjoey.”
The transaction is expected to take place in two tranches in June and July 2022.
Magellan shares were down 7.36 per cent to $15.97 at 11:06 am AEST. The company has a $3 billion market cap.