** Morningstar backs the proposed merger between Australian fund manager Platinum Asset Management PTM.AX and investment manager L1 Capital

** Says merger is "sensible for a business facing organic decline like Platinum"

** "Merger would arrest co's earnings decline by combining with another asset manager with better-performing products" - Morningstar

** Morningstar retains fair value estimate for combined entity at A$0.70 apiece

** Financial services firm recommends voting in favour of merger

** Earlier in May, PTM said company and L1 Capital had been in talks on deal to create A$18 billion ($11.70 billion) funds management group

** Company will hold meeting on September 22 for shareholders to vote on proposed merger

** One of four analysts rate the stock "buy" or higher, three "hold"; their median PT is A$0.56, according to data compiled by LSEG

** PTM up nearly 9% this year, as of last close

($1 = 1.5389 Australian dollars)

(Reporting by Rajasik Mukherjee in Bengaluru)

((Rajasik.Mukherjee@thomsonreuters.com))