Insignia Financial faces bidding war as $2.88b CC Capital bid tops Bain Capital’s spurned offer

Insignia Financial (ASX: IFL) is firmly in the sights of global private equity players after CC Capital Partners announced a $2.88 billion takeover offer for the Melbourne-based group, pipping a previously spurned bid from Bain Capital by $200 million.

Insignia, the wealth manager formerly known as IOOF Holdings and with a lineage that stretches back as far as 1846, has received an indicative non-binding proposal from CC Capital to acquire all of its shares for $4.30 each.

The offer is up from $4 per share received from Bain Capital on 12 December which valued the group at $2.68 billion.

Insignia notes that while the CC Capital offer is priced at a 7.5 per cent premium to that of Bain Capital, the board is considering the indicative proposal “to assess whether it is in the best interests of shareholders to engage with CC Capital”.

Insignia rejected Bain Capital’s offer on 18 December, arguing that the valuation did not “adequately represent fair value” and that it was not in the interests of its shareholders.

Insignia, which owns the MLC brand, has benefitted from a string of acquisitions in recent years helping deliver underlying net profit after tax of $217 million in FY24, up 13.6 per cent for the year on a continuing operations basis.

The group increased average funds under management and administration during the year by 3 per cent to $301 billion.

Both the CC Capital and Bain Capital offers are at a significant premium to Insignia Financial’s recent low of $3.04 per share recorded on 27 November and well up on the 52-week low of $2.04.

Market analysts are forecasting a bidding war for the group with the ball now sitting in Bain Capital’s court, pending a recommendation from Insignia on the CC Capital offer.

Shares in the Australian group surged today following news of CC Capital’s indicative offer with the shares trading above $4 for most of the afternoon session – up more than 13 per cent from Friday’s close.

The private equity suitors are both headquartered in the US with CC Capital based in New York and Bain Capital in Boston.

The indicative proposal from CC Capital is subject to several conditions, including an exclusive due diligence period and the execution of a binding scheme implementation agreement.

Any deal is still subject to board approval as well as green lights from the Foreign Investment Review Board and the Australian Prudential Regulation Authority.