PERTH: Euroz Hartleys Group Ltd. said Tuesday it has agreed to sell its capital markets business to BMO Financial Group for A$145 million in cash, a deal that will transform the Australian firm into a standalone wealth management company while returning the bulk of the sale proceeds to shareholders.
The binding agreement, announced after a period of exclusive due diligence, calls for BMO, the Canadian banking group, to acquire the institutional broking and corporate finance operations of the Perth-based firm. The transaction is subject to shareholder approval and regulatory clearances, with completion expected in the fourth quarter of calendar 2026.
Euroz Hartleys said it intends to distribute the post-tax net proceeds to shareholders through a combination of a fully franked dividend and a capital return. Further details will be provided in the notice of meeting for the shareholder vote.
“The A$145 million headline consideration is a reflection of the quality of our Capital Markets staff and their relationships,” Andrew McKenzie, executive chairman of Euroz Hartleys, said in a statement.
McKenzie and managing director Tim Bunney are expected to join BMO’s capital markets business after the deal closes but will continue as non-executive directors of Euroz Hartleys for the short to medium term, the company said. Both recused themselves from the independent board committee that reviewed the transaction.
The sale leaves Euroz Hartleys as a pure-play private wealth business with about A$5 billion in funds under management, roughly 60 advisers and a 71-year operating history. The firm will continue to operate under the Euroz Hartleys and Entrust brands and will retain its trading, clearing and settlement function, which will continue to serve the divested capital markets business under a separate services agreement.
As part of the transaction, Euroz Hartleys and BMO will enter into a four-year strategic alliance agreement, renewable for successive two-year terms, intended to preserve collaboration, research access and distribution opportunities between the wealth and capital markets businesses.
For BMO, the acquisition strengthens its position in metals and mining investment banking globally, according to Carrie Cook, global head of investment and corporate banking at BMO Capital Markets.
“This is a defining step forward in strengthening our position as the leading metals and mining investment bank globally,” Cook said. “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.”
Euroz Hartleys reported solid unaudited performance for the year to date and expects fiscal 2026 group revenue in the range of A$140 million to A$142 million and net profit after tax of A$15 million to A$16 million, inclusive of one-off transaction-related costs.
The independent board committee, with the assistance of financial adviser Grant Samuel and legal adviser Steinepreis Paganin, unanimously recommended that shareholders vote in favor of the transaction, absent a superior proposal and subject to the independent expert’s conclusion that the deal is in shareholders’ best interests.
Directors intend to vote their holdings, representing about 10.65% of shares outstanding, in favor of the transaction.
A break fee of A$1.5 million is payable by Euroz Hartleys to BMO under certain circumstances, including if the company pursues a competing proposal.
The company has begun an internal and external search for a new chief executive officer, who will join the board upon appointment.
Euroz Hartleys shareholders will be asked to vote on the transaction at an extraordinary general meeting scheduled for October or November, with a notice of meeting and independent expert’s report to be dispatched in August or September.
The Australian Taxation Office ruling on the proposed capital return is expected after completion.
BMO, the eighth-largest bank in North America by assets with about $1.5 trillion as of April 30, has been serving clients for more than 200 years.
