EUROZ Hartleys Agrees to Sell Capital Markets Arm to BMO for A$145M
Euroz Hartleys to sell Capital Markets business to BMO for A$145 million cash
Euroz Hartleys Group (ASX:EZL) has entered into a binding agreement to sell its Capital Markets business to BMO Financial Group for cash consideration of A$145 million, subject to customary completion adjustments.
The transaction delivers a dual outcome. It realises significant value for shareholders while allowing them to retain ownership of a focused, independent and ASX-listed Private Wealth business.
The buyer is BMO Australia Pty Limited, a wholly owned subsidiary of the Bank of Montreal. Completion is anticipated to occur in Q4 of calendar year 2026.
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What the deal delivers for shareholders
Subject to completion, Euroz Hartleys intends to return all of the post-tax net proceeds of the sale to shareholders. The company envisages the majority of the return will be in the form of a fully franked dividend, with the balance as a capital return. Full details will be provided in the Notice of Meeting.
Net proceeds will be determined after separation and transaction costs, tax on sale proceeds and customary completion adjustments. The proposed capital return is subject to shareholder approval and a class ruling from the Australian Taxation Office (ATO) confirming its tax treatment, with the ruling expected to be issued after completion.
The intended return builds on the company’s track record of returning more than A$421 million of dividends and capital to shareholders across its 26-year history.
The Independent Board Committee (IBC) identified four key benefits for shareholders:
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The A$145 million headline cash consideration represents compelling value for the Capital Markets business
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The ability to return net proceeds directly to shareholders through a combination of a fully franked dividend and capital return
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The opportunity to retain ownership of a focused, independent and ASX-listed Private Wealth business
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A strategic alliance with BMO that preserves the longstanding and interconnected relationship between the Capital Markets and Private Wealth businesses
Andrew McKenzie, Executive Chairman of Euroz Hartleys
“Following a disciplined negotiation process, the Board is pleased to have reached an outcome that delivers significant and certain value to our shareholders. The A$145 million headline consideration is a reflection of the quality of our Capital Markets staff and their relationships.”
Understanding the transaction structure and the BMO alliance
This is not a clean exit. Rather than fully severing ties, the two businesses will remain connected through a strategic Alliance Agreement, preserving the relationship that management considers a point of difference for clients.
The Alliance Agreement is expected to support continued collaboration, research access, distribution opportunities, deal flow and broader market connectivity. It carries an initial term of 4 years, with the option to renew for successive 2-year terms by mutual agreement.
Euroz Hartleys will also retain its trading, clearing and settlement function, continuing to provide those services to the Capital Markets business under a separate agreement. That agreement carries the same initial 4-year term with successive 2-year renewals. Under this arrangement, BMO will pay the associated costs and contribute additional capital to support the incremental liquidity and regulatory capital requirements.
A further transitional services agreement is expected to run for an initial 6 to 12 months, depending on the service provided, with BMO again paying the costs. Entry into the Alliance Agreement and these services arrangements is a condition precedent to completion of the transaction.
For investors, the structure matters because it preserves access to Capital Markets capabilities, research and primary market opportunities for Private Wealth clients, an interconnected relationship management describes as a key point of difference.
Carrie Cook, Global Head, Investment & Corporate Banking, BMO Capital Markets
“This is a defining step forward in strengthening our position as the leading metals and mining investment bank globally. By combining our global distribution capabilities with deep local expertise in Australia, we are building a more connected platform that will enable clients to access capital and opportunities across markets.”
The new Euroz Hartleys, a pure-play wealth manager
Should the transaction proceed to completion, Euroz Hartleys will continue as a standalone, independent ASX-listed wealth management business operating under the Euroz Hartleys and Entrust brands.
According to the company, the standalone structure will provide greater strategic focus, direct control over capital allocation and increased flexibility to invest in advisers, technology, client outcomes and future growth initiatives.
The post-completion business will comprise:
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Approximately A$5 billion in funds under management
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Around 60 advisers
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A 71-year heritage of providing advice to individuals, family offices, ultra and high net worth clients
The Board believes the business is well positioned to benefit from favourable structural industry trends, including intergenerational wealth transfer, increasing financial complexity and growing demand for high-quality independent financial advice.
On leadership, Andrew McKenzie and Tim Bunney are expected to transition to the Capital Markets business following completion. To ensure continuity, both are expected to continue serving as Non-Executive Directors of Euroz Hartleys for the short to medium term. The company has commenced an internal and external search for a new Chief Executive Officer, who will join the Board upon appointment.
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FY26 performance, board recommendation and what happens next
Euroz Hartleys reported a solid year to date. Based on unaudited performance, the company expects FY26 group revenue in the range of A$140 million to A$142 million and group net profit after tax in the range of A$15 million to A$16 million, inclusive of a number of one-off transaction related costs and effects. These costs and impacts are currently expected to be between A$4 million and A$5 million in FY26. Full-year results for the period ending 30 June 2026 are due in August.
The IBC, comprising only independent and non-executive directors, unanimously recommends that shareholders vote in favour of the transaction. That recommendation stands in the absence of a superior proposal and subject to the Independent Expert concluding, and continuing to conclude, that the transaction is in the best interests of shareholders. The IBC was assisted by Grant Samuel as financial adviser and Steinepreis Paganin as legal adviser.
Because McKenzie and Bunney are expected to join BMO following completion, they were not members of the IBC. Both led the negotiation for the company under the oversight of the IBC in their capacity as senior executive management.
Subject to the same qualifications, each director intends to vote, or cause to be voted, all shares held or controlled by them in favour of the transaction, representing approximately 10.65% of shares on issue.
An indicative timetable for the transaction, which is subject to change, is set out below.
| Event | Expected Date |
|---|---|
| Announcement of Transaction | 30 June 2026 |
| Despatch Notice of Meeting and Independent Expert’s Report | August / September 2026 |
| Extraordinary General Meeting to approve Transaction | October / November 2026 |
| Completion of Transaction (subject to conditions) | November / December 2026 |
Key terms of the transaction, summarised from Schedule 1, include:
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Purchase price: A$145 million base, adjusted upward or downward by the difference between estimated and actual completion adjustment items.
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Exclusivity: Customary no-shop, no-talk and no due diligence obligations until the earlier of completion, termination, or 31 January 2027, subject to a fiduciary carve-out.
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Break fee: A$1,500,000 payable by Euroz Hartleys to BMO in defined circumstances.
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Non-compete: 3-year restrictions in favour of the Capital Markets business.
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ASX confirmation: ASX has confirmed that Listing Rules 11.1.2 and 11.1.3 do not apply, with the transaction subject to approval under Rule 11.2.
Shareholders do not need to take any action at this time. Further details regarding the return of proceeds, including the mix between fully franked dividend and capital return, the expected tax treatment for shareholders and the expected ongoing capital position of Euroz Hartleys, will be provided in the Notice of Meeting.
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