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Hunter Hall fields takeover offers after founder Peter Hall's shock resignation

Hard on the heels of founder Peter Hall's sudden decision to quit as chief investment officer, investment firm Hunter Hall is fielding takeover offers from other fund management companies.  

Hunter Hall Investments, which is 44 per cent owned by Mr Hall, manages several listed and unlisted funds, including Hunter Hall Global Value, with more than $1 billion in assets under management.

Trading in its shares had been halted since December 28, following Mr Hall's surprise decision to quit as the firm's top stock picker, although he will continue as the chief executive.

When trading resumed on Friday, the prospect of a potential sale of the firm helped stem the extent of its share price decline, with the company's shares down 4.6 per cent at $3.10 in afternoon trading. For its Global Value Fund, the shares eased 3 per cent to $1.21.5c, putting them at a slight discount to the net value of its assets of $1.23.99c, and prompting the firm to approve a share buyback of as much as 10 per cent of its stock to help put a floor under the shares.

In the wake of Mr Hall's sudden resignation as chief investment officer, there have been several approaches to buy all or part of the company's shares, Hunter Hall said. The statement comes amid concerns that the loss of Mr Hall could undermine confidence in the outlook for its funds, prompting investors to take their money elsewhere.

Among the interest parties for the company "are significant players in the investment management business with experience managing Australian and global funds," the company explained. "The board is currently assessing all options to maximise value for shareholders and ensure the continued stewardship of our funds under management."

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The status of any negotiations that may be underway is unclear at this point.

After Mr Hall's departure was announced, investment research firm Morningstar placed its rating of the group's funds under review, citing the "very significant key man risk".

"While portfolio management at Hunter Hall was not under the sole responsibility of Peter Hall, he remained a very significant key man risk," Morningstar told clients on Wednesday. "We view his departure as a material change to the business and a risk for fund performance."

The group's funds have adopted a "fundamental value-based contrarian investment philosophy, with an ethical tilt", Morningstar told clients.

In the wake of the global financial crisis, some of the groups funds suffered a sustained period of underperformance with a loss of funds under management as well as the loss of some key fund managers.

"While Hunter Hall is improving it still needs an extended period of stability and consistency, in the near term," Morningstar said.

Mr Hall will continue as chief investment officer until the end of his six-month notice period in June unless agreed otherwise, the board said in its statement. It said it would update the market on the sale negotiations when it has more information.

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