INSIGNIA Financial’s shares hit a three-year high on Thursday (Jan 23), driven by a revised takeover offer of A$3.07 billion (S$2.6 billion) from US-based Bain Capital, matching the bid of rival CC Capital Partners and fuelling a heated bidding war.
Insignia Financial had previously rebuffed an approach from private equity firm Bain Capital in late December, deeming the offer insufficient for its shareholders.
The 178-year-old Australian money manager’s initial reluctance to engage with Bain Capital sparked a bidding war, with US-based investment manager CC Capital Partners subsequently entering the fray.
The revised proposal from Bain Capital values Insignia Financial’s shares at a 3.8 per cent premium over their last closing price of A$4.43 each. This bid is a notable improvement over Bain’s initial non-binding indicative offer of A$4.30 per share, representing a 7 per cent increase.
In early trading, shares rose by up to 2.7 per cent to A$4.55 per share, their highest since October 2021, albeit still below the A$4.43 per share cash offer.
Earlier this month, CC Capital Partners had upped the ante with a rival bid, seeking to gain a foothold in Australia’s lucrative A$4.1 trillion superannuation system, a prize that has driven the intense bidding competition between the two suitors.
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CC Capital did not immediately respond to a request for comment.
In a bid to possibly enhance their proposals, Insignia Financial has granted Bain Capital a limited duration of access to select non-public information on a non-exclusive basis. A similar offer was made to CC Capital Partners earlier this week.
“The provision of limited due diligence does not guarantee that the Bain second revised indicative proposal will result in a binding offer or one that is capable of being recommended by the Board of Insignia Financial,” the company clarified.
Insignia Financial’s funds under management and administration surged by A$7.2 billion to A$326.8 billion as at Dec 31, underscoring the strong investor appetite for Australian-listed wealth managers with growing asset bases. REUTERS
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