SFG Australia’s Shadforth brand will be maintained under a proposed takeover by IOOF Holdings.

In an explanatory memo, IOOF says it intends to keep SFG’s “brands, operating model and client proposition”, and it will be “business as usual” for the company’s operations.

However, it warns of staff losses in some cases.

“IOOF expects combining IOOF and SFG will result in duplication across a number of areas of business, including employee roles,” the memo said.

“To create value for shareholders, IOOF intends to remove these duplications, with the aim of delivering the expected synergy benefits.”   

A plan to merge the dealer group’s operations into one entity is expected to deliver pre-tax synergies of at least $15 million by July 1 2016.

SFG MD Tony Fenning will stay on as a specialist adviser for a year after the takeover.

He will also join an advisory forum to help run the dealer group, along with SFG directors James Kilkenny and John Gannon.

The number of advisers at the combined group will be 1119, up from 937 currently with IOOF. Its revenue will be about $842.2 million in the current financial year.

IOOF has sweetened the takeover deal with a cash pool of $100 million for SFG shareholders if they accept.

Alternatively, shareholders can accept 0.104 of an IOOF share for every SFG share they own.

The cash deal will be calculated on the volume-weighted average price of IOOF shares in the 10 days before an SFG shareholder meeting on August 1.

Subject to regulatory approvals, the deal will be completed by August 20.

SFG directors have agreed to the takeover and an expert’s report by Ernst & Young says it is fair and reasonable.

SFG Chairman Peter Promnitz says joining a larger listed business is part of the financial planning firm’s expansion strategy.

“This is a significant step in the journey of SFG and is consistent with our strategy of achieving organic growth.”

IOOF Chairman Roger Sexton says the takeover will “create a powerful new force in the financial services marketplace. The combination of SFG’s strengths – particularly through its high-quality adviser network – and those of IOOF will allow the combined group to capture significant increased revenue across the value chain, including insurance, advice and accounting.”