UPDATE 2.55pm: Fund manager IOOF will takeover Plan B in a friendly off-market takeover valuing the company at $49.1 million.
IOOF will pay 60 cents a share for Plan B, minus a planned three-cents-a-share, fully franked final dividend to be issued by the company.
The price represents a 33 per cent premium to Plan B's last traded price before the announcement of 45 cents.
Shares in the group jumped 14 cents, or 31 per cent, to 59 cents on the news while IOOF shares were down 11 cents, or 1.87 per cent, at $5.77.
The deal will add $2.2 billion to IOOF's funds under management and allow IOOF to expand its footprint in New Zealand's retirement savings market and in WA and Queensland.
The acquisition will be funded by debt.
IOOF said the acquisition was a good strategic fit for the company because it would increase the number of IOOF-aligned advisers and integrate easily into its existing operation and provide beneficial recurring synergies by June 30, 2014.
IOOF managing director Christopher Kelaher said the acquisition of Plan B represented a unique opportunity to combine two highly complementary businesses.
"The recent market volatility has illustrated the importance of size and scale in terms of competitive position," he said.
Plan B's chief executive Andrew Black said the transaction would bring together two like-minded businesses that were focused on delivering high quality services to clients.
"We will be able to access a stronger financial base of a much larger group while preserving the unique relationship with our clients," he said.
Plan B was established in 1986, providing investment advice and wealth management services.