Charter Hall Group could pay 10 to 12 times earnings for Hastings Funds Management and boost its own earnings per share by about 4 per cent.
That's the view of Macquarie analysts on Wednesday morning, who ran the numbers on a transaction following Street Talk's report that Charter Hall was in early stage talks with Hastings and its major shareholder Westpac Banking Corp.
"We can see the merits in CHC extending its significant domestic and international property investor relationships and retail distribution channels into new infrastructure opportunities," Macquarie told clients.
"Indeed, listed and unlisted investment teams across real estate are increasingly also considering opportunities in infrastructure.
"The rationale for combining two fund managers with specific experience in each sub-sector appears reasonable."
Macquarie said Hastings had earnings of $17.2 million to $77.4 million in recent financial years, with performance fees driving the fluctuations.
The analysts said Hastings could be worth $150 million to $360 million, given a 10 to 12-times price to earnings multiple and potential net profit after tax worth $15 million to $30 million a year.
Charter Hall is a listed real estate funds manager with $19 billion in funds under management as at December 31.
Hastings is an infrastructure asset management with $12.8 billion under management as at the end of last year.
