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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  Macquarie Group Limited    MQG   AU000000MQG1

MACQUARIE GROUP LIMITED

(MQG)
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REFILE-UPDATE 4-Australia's Macquarie splurges $1.7 bln on U.S. adviser Waddell & Reed

12/02/2020 | 05:37pm EST

(Corrects headline spelling of "splurges")

* Waddell & Reed shares soar 47% after hefty premium offered

* Macquarie to sell Waddell & Reed's wealth management unit to LPL

* First major deal under new CEO Wikramanayake

SYDNEY, Dec 3 (Reuters) - Australia's Macquarie Group said on Thursday it would buy U.S. wealth manager Waddell & Reed Financial Inc for $1.7 billion, its first major deal under a new CEO that expands its presence in the world's largest retail finance market.

The purchase, one of the biggest finance industry buyouts by an Australian entity, puts Macquarie in the top 25 U.S. fund managers, it said, and reinforces a core business of a company that has diversified into running M&A deals, owning infrastructure, trading commodities and selling home loans.

CEO Shemara Wikramanayake, who started in the role two years ago after running the division responsible for Thursday's purchase, had previously said she wanted to make large acquisitions. The choice of Waddell & Reed, a 70-year-old Kansas firm with 922 advisers, shows Wikramanayake keeping a global focus without reinventing the company's business profile.

"We see the deal as financially compelling," said Morgan Stanley analysts in a client note. "This signals (Macquarie) is ready to deploy excess capital."

Goldman Sachs analysts said "the potential scale benefits make sense" and suggested Macquarie would target a similar opportunity in Europe for its next purchase with A$8.5 billion in surplus capital.

Shares of Waddell & Reed soared 47% in extended trading, in line with the premium Macquarie offered to its last closing price, while Macquarie shares were flat against a slightly higher Australian market.

As part of the deal, Macquarie will sell Waddell & Reed's wealth management platform to U.S. investment adviser LPL Financial Holdings Inc for $300 million, and then begin a partnership with the firm.

Waddell & Reed had in recent years become a "diversified and growth-oriented financial services enterprise (and) the long-term partnership between Macquarie and LPL as part of this transaction accelerates that transformation", the target company's CEO Philip J. Sanders said. (Reporting by Paulina Duran and Byron Kaye in Sydney, with additional reporting by Ayanti Bera in Bengaluru; Editing by Amy Caren Daniel and Lincoln Feast.)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
LPL FINANCIAL HOLDINGS INC. -1.60% 114.93 Delayed Quote.10.28%
MACQUARIE GROUP LIMITED -1.69% 137.1 End-of-day quote.-1.00%
THE GOLDMAN SACHS GROUP, INC. 0.01% 289.39 Delayed Quote.9.73%
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Financials
Sales 2021 11 204 M 8 637 M 8 637 M
Net income 2021 2 214 M 1 707 M 1 707 M
Net Debt 2021 53 524 M 41 262 M 41 262 M
P/E ratio 2021 22,9x
Yield 2021 2,56%
Capitalization 47 446 M 36 612 M 36 576 M
EV / Sales 2021 9,01x
EV / Sales 2022 9,02x
Nbr of Employees 16 356
Free-Float 91,2%
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Technical analysis trends MACQUARIE GROUP LIMITED
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TrendsNeutralBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 13
Average target price 143,43 AUD
Last Close Price 137,10 AUD
Spread / Highest target 11,8%
Spread / Average Target 4,62%
Spread / Lowest Target -8,83%
EPS Revisions
Managers and Directors
NameTitle
Shemara Wikramanayake Chief Executive Officer, MD & Executive Director
Peter Hastings Warne Independent Chairman
Nicole Sorbara COO & Head-Corporate Operations Group
Alex H. Harvey CFO & Head-Financial Management Group
Diane Jennifer Grady Independent Non-Executive Director
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