** Shares of Platinum Asset Management PTM.AX rose as much as 15.8% to A$0.660, their highest level since February 26; last up 6.1%

** Fund manager says it is in discussions with L1 Capital on a potential merger

** Says potential merger to combine the two companies to form an investment business with funds under management of about A$18 billion ($11.53 billion)

** About 2.6 mln shares change hands vs the 30-day average of 1.8 mln shares

** Stock down 7.3% YTD, including current session's moves

($1 = 1.5605 Australian dollars)

(Reporting by Manasi Dasa in Bengaluru)

((Manasi.DasaSundeep@thomsonreuters.com;))